Oil rises, gold pulls back as markets jitters ease

Will economic fears fully abate?

Oil prices are rising again on Tuesday, adding to Monday's recovery to trade more than 6% from the lows. Brent fell close to $70 yesterday, the lowest level since late-2021 is a sign of how much the banking crisis has reverberated throughout the markets. Contagion risks recession and that means much weaker demand, although of course there is more than one side to that equation when it comes to the price of oil.

Either way, it's bouncing back today alongside risk appetite and it will be interesting to see where it settles. It traded within a wide range from early December to last week and there's no guarantee it will just fall back into that again if the dust settles.

Paring gains ahead of the Fed

Gold is pulling back for a second day, paring gains as some calm returns to markets and yields move higher. It's performed extremely well over the last couple of weeks, aided by a sharp decline in bond yields, a softer dollar, and a dash for safety so it makes sense that it's giving some of that back. The first test of support falls around $1,960, around the early February peak, although if sentiment continues to improve, that may not hold for long. That said, it won't take much for risk aversion to return and then there's the Fed tomorrow which could have a big impact, depending on how hawkish it chooses to be.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/