Oil bulls thought they were in the clear, but ‘just when they thought they were out, they pull me back in.’ Oil’s true enemy is global growth fears and they are not going away anytime soon. In addition to a weakening crude demand outlook, Iran reportedly gave into a ‘red line demand’ that might be a gamechanger in reviving the elusive nuclear deal. The crude demand outlook is taking a big hit from elevated risks that Europe’s recession will be severe and as several Chinese companies are following the government’s advice to conserve energy. King Dollar is also making a return so that could contribute to further momentum selling across all commodities, especially oil.
Gold nervously eyes Jackson Hole
Gold prices are weakening as King Dollar returns as investors brace for a potentially hawkish speech by Fed Chair Powell at the Jackson Hole Symposium on Friday. Gold will eventually settle on a trading range, but it seems the floor might be a little lower as the risks of energy and food inflation could keep the Fed remaining aggressive with rate hikes into the new year.
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