Oil drifting, gold pares gains

Oil remains rangebound after recovery this week

Oil prices are a little lower on Thursday after rallying strongly the previous two days. The flirtation below USD 100 didn't last long as the slight lifting of restrictions in China partly removed one key downside risk for prices. With the IEA reserve release priced in, that leaves the risks heavily tilted to the upside as OPEC remains committed to its key ally and unable to hit the quotas its been set anyway.

That could leave Brent prices ranging between USD 100 and USD 120 for now, with WTI more like USD 95 - USD 115. There's no shortage of risks to that though and this remains an incredibly headline-driven market. The prospect of Finland and Sweden joining the NATO alliance is unlikely to ease tensions between Russia and the West which could further spill over into the oil market.

Gold pares gains but could be pushing for a major breakout

It would appear gold isn't going to extend its winning run to seven days ahead of the long weekend. It's trading a little lower on Thursday after running into some resistance around USD 1,980. The yellow metal continues to show momentum which may suggest a run at USD 2,000 is on the cards. At a time of such aggressive tightening, it's unclear whether it's a fear of inflation, the economy or risk that's driving the move, perhaps all of the above. But there's no shortage of demand at the moment.