Oil and gold dragged down on weakening outlook and inflation risks


Crude prices are declining as the risks to the global outlook become overwhelming; ​ ​ China’s economy isn’t roaring back, global recession fears are returning after inflation unexpectedly rose in Spain, and as investors remain cautious ahead of a busy week of central bank decisions and peak earnings season. ​

Oil is pulling back here as the vibe on Wall Street is to be ready to de-risk later this week. ​ Growth prospects are weakening here and that should not do any favors for an already weakening short-term crude demand outlook.

In addition to the Fed, earnings and a jobs report, energy traders will pay close attention to an OPEC+ meeting that could see output remain steady. ​ President Putin had a phone call with the Saudi Crown Prince, which some are viewing as positive that the group is in agreement with the path on output.

WTI crude may edge lower but should have support well ahead of this month’s low.


Gold prices are weakening as global bond yields rally after a hot inflation report from Madrid reminded investors that maybe they were too quick in declaring the inflation fight is nearly over. ​ Gold’s main kryptonite is if the Fed can’t control inflation and they need to tighten much more than markets are expecting. ​ Gold could enter the ‘danger zone’ if we get a couple more hotter-than-expected inflation reports and a robust NFP report that suggests wage pressures will be here for a while. Disinflation trends still remain in the US but any shock CPI report could disrupt the very bullish outlook that has been building up for bullion.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.