Oil price correction continues, gold bounces back

Is oil looking to close the gap?

We’re continuing to see a correction in oil prices following a more than 2% decline on Wednesday. That saw the price move below the post-OPEC+ cut lows from a couple of weeks ago and move into the void left by that surprise announcement.

Now it’s a question of whether that gap will be filled, with the high from the Friday before falling just shy of $76 in WTI and $78 in Brent. That would require another drop of around 3% but only take the price back to the middle of the range oil was trading in for months prior to the SVB collapse.

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WTI/USD Technical

Gold rebounds but may need Fed boost

Gold prices rebounded on Wednesday after falling back toward $1,970, a little above the $1,940-$1,960 region that stood out as a big support region. We could still see further pressure to the downside for gold prices if yields continue creeping higher but that has stalled a little following a decent rebound in recent days.

It still feels like markets are finding their feet in the aftermath of the mini-banking crisis last month and I don’t think we’re even nearly there yet. The full ramifications on credit markets and the economy will soon become clear, after which we could see a significant adjustment in interest rate expectations, bond markets, and therefore gold. If that adjustment is much lower for rates, record highs may not be that far away.

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XAU/USD Technical

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