Oil rises on China optimism, gold rebounds


Oil prices initially rose on hopes that both China’s COVID situation might be improving as protests are pressuring officials to ease some rules. China’s COVID infections declined for the first time in a week, and they are ramping up vaccination efforts for the elderly.

The recent slide in oil prices has complicated where the EU should put the Russian oil price cap. The EU has discussed setting a cap as low as the $62 level, but no consensus agreement seems to be in place. ​ ​ ​

Energy markets are not properly pricing how resilient the global economy remains and this week we could see an upward revision with the US Q3 GDP reading, while Turkey and Sweden will still show their respective economies grew.

Oil’s rally ran out of steam after reports that OPEC+ might end up keeping their output steady. ​ Expectations were growing for them to seriously consider an output cut as China’s COVID situation steadily worsened. ​


Gold prices rallied as the dollar softened over optimism that China’s outlook might be starting to improve. ​ Gold needs a strong China as it drives risk appetite and could bolster demand for jewelry. ​ Gold could extend gains if China’s Health Authority provides some clear signals that they are close to tweaking their Zero-COVID policy.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya