Oil edges lower, Fed sends gold lower

Oil edges lower

Oil prices are a little lower on Thursday after recording three consecutive days of gains. A stronger post-Fed dollar, fears of slower growth, or a surprisingly large inventory build from EIA may be contributing to today’s declines but in reality, we’re probably just seeing a little profit-taking following a decent rebound.

The outlook remains highly uncertain given the risks to Chinese demand as it exits zero Covid, the war in Ukraine and the impact of the G7 price cap, and OPEC+, among other factors. The rebound off $70 suggests there may be a psychological element as well after the White House previously indicated it would start refilling the SPR around these levels.

Gold pulls back but traders not buying new projections

Gold is off around 1% today following the disappointment of the Fed projections. While the dollar initially pared gains, it has been on the rise since which is weighing on the yellow metal. The rally had already been losing momentum in the run-up to the meeting which is probably contributing to today’s pullback. Whether it can make further progress from here may depend on how good a job the Fed does in convincing traders of its intentions, with the initial reaction suggesting they’re not fully buying it.

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

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