Oil in choppy waters, gold eyes US inflation and the Fed

Oil remains volatile but below pre-US regional banking crisis range

It’s been a very choppy week in oil markets, with traders forced to digest the latest compromise deal from OPEC+ against the backdrop of more interest rate hikes and dampening prospects for the global economy. Resilience in the economy now is impressive but the longer it lasts, the more it will be met with higher interest rates that could ultimately deliver a harder landing.

That oil failed to break back into the band it was trading in between December and March despite a further cut from Saudi Arabia says everything about traders’ views on the economy. Not to mention that it will infuriate the Saudis who have once more failed to manipulate the price higher. What more can they realistically do?

Brent has been firmly entrenched in the $70-$80 range for more than a month now and if Saudi Arabia can’t get the rest of the alliance on board before the end of the year, you have to wonder what the bullish case for crude will be. Stronger growth is obviously one but that isn’t exactly conducive to ongoing rate hikes and stubbornly high inflation.

Gold choppy ahead of US inflation and the Fed next week

Gold has also been very choppy in recent weeks with the lack of conviction in the economic data not helpful in tipping the balance one way or another. The yellow metal has broadly traded between $1,940 and $1,980 and traders may now have an eye on the US inflation data on Tuesday, a day before the Fed meeting.

These events may ultimately determine whether gold breaks higher once more with potential record high ambitions or continues to correct lower, having so far fallen almost 7% from the March highs.

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

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

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.