Oil pares gains but remains in consolidation
Oil prices are slipping a little on Tuesday after rebounding at the start of the week. The threat of European sanctions on Russian oil remains an upside risk for crude prices despite the firm opposition in the short term from certain member states. The release of reserves has helped take some of the pressure off amid disruptions to Russian supply but this is still a tight market and greater risks continue to be to the upside. That said, the trend in recent weeks has broadly been one of consolidation, albeit following an extremely volatile period and what we’ve seen so far this week doesn’t suggest anything has changed.
Gold slips back
Gold continues to consolidate above USD 1,900, with the yellow metal making small losses on the day while lacking any real longer-term direction. That case could be made across various asset classes at the moment which is perhaps a sign of the limbo investors find themselves in; recession risks but a hot economy, peace talks without any sign of peace, etc. It’s interesting that the rallies are failing a little earlier each time over recent weeks which could be a small sign of weakness but as it is, there remains plenty of appetite for a safe haven and inflation hedge.
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