Oil steadies, gold declines

Oil stabilising

A strong rebound in oil prices on Thursday coincided with the broader risk reversal in the markets, taking Brent back towards $95 a barrel. This sits right in the middle of the range that Brent may establish itself in now, between $90 and $100. This has been touted as the potential target range for OPEC+ and may prove to be something that consuming countries can just about tolerate. Although with midterms coming up, another SPR release can’t be ruled out in the short term. The global growth outlook remains a major downside risk, also, and with labour markets remaining tight and inflation stubborn, further downgrades could be on the cards.

On the decline after whipsaw session

Gold prices whipsawed alongside other assets on Thursday but are trading around half a percentage point lower this morning. The inflation data was terrible for the yellow metal as it cemented a 75 basis point hike from the Fed next month. Not just that, with inflation seemingly so stubborn, it may need to go further than markets previously anticipated. That doesn’t bode well for gold in the near term. Yesterday’s lows around $1,640 could soon be tested once more, with the late-September lows the next test after that.

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.