Oil struggling over bank turmoil, gold eyes CPI

Oil struggling to recover after latest turbulence in US regional banks

Oil traders clearly remain deeply concerned about the turbulence in the US regional banks and what the consequences could be for the US economy, alongside the ripple effects elsewhere. Twice now we’ve seen the price plunge on the back of bank failures and so far this time, they haven’t had the helping hand of OPEC+ to repair the damage.

For the next month, at least, the bullish case for oil may come from fears subsiding around US banks but that may be a lot to ask considering how quickly the collapse of First Republic eventually unfolded after earlier turmoil. Others could easily follow. Until then, just getting back into the December to March range could be an achievement.

Gold edges higher ahead of the US inflation report

Gold is trading above $2,000 and a little higher on the day but it is still some way shy of record highs, a level bulls may have an eye on if we see a softer CPI inflation report on Wednesday. The yellow metal has been buoyed by a drastic repricing of US interest rate expectations since March and over the next couple of months, we’ll see just how fair that repricing has been.

A softer reading on Friday will be a big step in the right direction following a disappointing jobs report on the earnings side. A hotter report could cause another wobble and see gold’s run at record territory paused. The rally is already running on fumes and a hot report could trigger a corrective move in the short-term.

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

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Craig Erlam

Craig Erlam

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.