Oil steadies as traders grow more optimistic
Oil prices have steadied this morning after recovering strongly on Wednesday. Enthusiasm is building in the aftermath of last week’s jobs report and a positive inflation reading today could further fuel that. The prospect of a softer landing, even avoiding recession, is as good as investors could have realistically hoped for once it became clear how high inflation was going to rise last year.
A softer landing for the US, and perhaps elsewhere, combined with a strong economic rebound in China following the current Covid wave could make for a much better year than feared and stimulate extra crude demand. Of course, this case very much focuses on the promising scenarios but they are also increasingly looking like the more plausible ones as well.
Gold trading around pivotal technical zone
The gold rally is continuing to stall around $1,880, the lower end of a range that has been a major point of support and resistance in recent years. The range between $1,880 and $1,920 could be pivotal once more, either as a barrier of resistance in the event that inflation disappoints, or a signal of renewed bullishness if a positive report is the catalyst for a break above. Either way, we could see plenty of volatility in the aftermath of the release.
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