Oil pushing higher but economic fears continue to weigh
Oil prices are rebounding today but how long will that last? The oil price was hammered once more by US banking fears earlier this month and I’m not sure those have yet receded to the extent that oil can make a full recovery without another OPEC+ intervention.
If credit conditions ease over the coming months, allaying economic fears for the world’s largest economy, oil prices could bounce back without assistance but it seems a little premature at this point. The key test will come around $78 in Brent which represents both the trend lows from December to March and last week’s peak.
Could debt ceiling talks spur a record run for gold?
Gold is marginally higher at the start of the week but it may be struggling a little more broadly. It’s failed to generate the required momentum near those record highs that have been approached repeatedly in recent weeks and I’m not sure anything has changed on that front.
We may need to see something more than slightly modest beats on inflation data to trigger a powerful run at those highs around $2,070. Debt ceiling anxiety could be that catalyst but it just all feels a bit false at this point. No one wants a US default and therefore it won’t happen. But the closer we get, the more nerves could creep in, at which point gold looks much more appealing.
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