Oil edges lower, gold eyes inflation report

Profit-taking ahead of CPI data

Oil prices are a little lower at the beginning of the week. Last week saw them bounce back strongly on optimism around China’s economic recovery, post Covid transition. We are perhaps seeing some profit-taking now ahead of tomorrow’s inflation report which could have a big impact on sentiment one way or another.

Another favourable inflation report could see oil test the highs of December and January around $82 in WTI and $89 in Brent. They haven’t been able to break that barrier yet despite the optimism around China but the prospect of a lower US terminal rate and soft landing could be enough to break through.

Correction ongoing

Gold is struggling a little on Monday, off more than half a percent and hitting its lowest level since early January. The correction it would appear is ongoing, with $1,820-$1,830 the next test of support, followed by $1,780-$1,800 which still looks more interesting. Ultimately, whether it remains in a corrective phase probably depends on tomorrow’s inflation data and it could take something much lower for it to bounce back, following the January jobs report.

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

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Former Craig

Former Craig

Former 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.