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.
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