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Oil’s one-way move, gold breakout,

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Oil keeps rolling

It appears that crude prices are still on a one-way street headed towards USD 100 oil.  The improving demand outlook and vulnerable supply situation suggest the oil market will remain tight for the foreseeable future. It seems like the list of disruptions to supply keeps on growing, in the past week the following countries have been impacted: Libya, the US (North Dakota), Peru, Iraq to Turkey, UAE, and Kazakhstan.

The lack of investment in new wells suggests the oil market will remain very tight going forward and that should support higher prices deep into the summer.

Gold

Gold prices surged as the bond market selloff appears to be over for now.  Gold traders used the London Bullion Market Association auction as the catalyst to send prices tentatively above the upper boundaries of its recent trading range.  After the 10-year Treasury failed to reach 1.90%, that was the all-clear signal for many traders to pile back into risk assets such as commodities.

It is important to note that Barrick Gold Corp reported preliminary fourth-quarter sales volume and production levels that came in better-than-expected, supporting a tighter market.

Gold wasn’t supposed to break above the USD 1840 level before next week, so it should be interesting to see if this rally sticks.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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