Oil trades around USD 100, gold edges higher

Oil hovers amid recession chat

Oil prices are cautiously higher again on Wednesday, with Brent trading around USD 100 and WTI a little below. It’s interesting that the recession narrative is having a significant impact on the crude price, even as the market remains extremely tight. It shows how big a risk it has become in the mind of traders as for a long time, the price of oil appeared to only be heading in one direction. The next 24 hours could be massive on that front, from the Fed to the economy and the corporate outlook.

Gold edges higher ahead of the Fed

Gold is marginally higher ahead of the Fed decision, trading around USD 1,720. Any kind of dovish pivot from the Fed, even a move to data dependency going forward, could be a positive outcome for gold while a 1% hike or strong indication towards 75 basis points in September could see USD 1,700 come under strain. Of course, that may be oversimplifying things as the decisions always carry plenty of caveats that could impact how it is interpreted and therefore the impact on the markets. It all depends on how seriously the FOMC views the economic risks in the months ahead and the range of options it wants to leave on the table.

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Craig Erlam

Craig Erlam

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.
Craig Erlam