Oil boosted by optimism, gold has momentum

Oil buoyed by economic optimism

Oil prices are marginally lower today but have recovered the bulk of their earlier losses. They’ve been on a good run since getting the year off to a bad start in the opening couple of sessions. No doubt the improved optimism over the economy is playing a big role in that, with the prospect of fewer rate hikes and maybe even cuts before the year is out making the headwinds less fierce.

China is also a big factor in all of this. Of course, it’s tough to get a true gauge of the disruption the current wave is having on the economy but there’s no shortage of optimism for the rest of the year, particularly the second half. It could even come as early as the second quarter although that very much depends on how rapidly it spreads now. Brent may now be stabilizing in the $85-90 range, with WTI just a little lower around $80-85.

Eyeing record highs?

Gold is marginally lower today after peaking earlier in the session. It’s running into a little resistance just above the upper end of a key zone, between $1,880-$1,920. This had the potential to cause it some difficulty, having done so repeatedly in the past but that doesn’t appear to be the case. It’s rallied strongly again in recent days and momentum has been rising along with it. A close above $1,920, backed by momentum, could see attention turn to $2,000, a level it hasn’t traded above since March last year, and even then it only lasted about a week before it fell back below.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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.

Craig Erlam

Craig Erlam

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.
Craig Erlam