Oil dips on China, gold eyes Powell

Oil slips on modest Chinese growth target

It’s not been a great day for commodities as a whole and that includes oil, which is down a little over 1% on the day. One big upside risk for oil prices this year was a strong, stimulus-driven, rebound in China and it would appear that isn’t going to happen. That said, the growth target is probably a minimum aim and one that could easily be surpassed but it does make stimulus less likely.

Oil prices are a little lower on the day but those losses pale in comparison to the rally last week. They’re still not too far from the upper end of their range of the last few months, although the news does make a breakout to the upside that much more challenging.

Stalling ahead of Powell’s testimony

Gold is edging lower today after a strong rebound last week. The yellow metal is struggling around $1,860 which was always likely to be the first big test above. A move above here could see $1,900 back in focus, although that may well depend on how the two-day testimony in Congress unfolds and, of course, Friday’s jobs report. Another red-hot report could see gold quickly lose any bullish momentum and potentially $1,780-$1,800 come under real strain.

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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