Oil gets support, gold breaks $2000

Oil seeing some support

The sell-off in oil markets appears to be running into support following the near-20% decline over the last couple of weeks. Traders have been forced to reassess the outlook for the global economy in light of recent issues in the banking sector and it would appear they’re no longer so optimistic.

That may of course change as things settle down, assuming they do in the short term, but for now, they’re taking a far more cautious stance. Brent saw support around $70 and in recent days has bounced back strongly from early sell-offs, which could suggest a rebound is on the cards.

Record highs in sight?

Gold traded above $2,000 for the first time since March last year and only the fifth day ever earlier, a move that will get traders talking about the prospect of record highs in the not-too-distant future. The yellow metal has been buoyed by lower yields, a softer dollar, and a flight for safety over the last couple of weeks.

The next test of its bullishness may come Wednesday and perhaps not from the rate decision itself but what Powell and his colleague have to say on the path forward. His counterpart at the ECB opted to remain tight-lipped on future moves and a similar approach from the Fed could see gold spike once more.

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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