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Oil climbs, gold in choppy waters

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Oil jumps again amid Shanghai reopening

The price of a barrel of Brent crude hit USD 120 earlier in the day on the back of the EU deal, as well as the continued reopening of Shanghai and the better than expected Chinese PMIs. The gradual phasing in of the deal along with the exemptions included prevented the price from rising much higher but ultimately it further tightens a market that’s already undersupplied.

The reopenings in China are another major bullish factor for crude prices, for obvious reasons. While the manufacturing and non-manufacturing PMIs were both still contractionary, they were also much better than expected and a significant improvement on April. The lifting of restrictions will see these improve further which will be another upside risk for oil prices.

Gold slipping as yields rise

Gold remains choppy around USD 1,850 and a little lower on the day despite the risk-averse trade we’re seeing in Europe and ahead of the open on Wall Street. The dollar is up around 0.3%, mirroring gold’s declines as US yields have crept higher once more. The gold rally was and remains vulnerable to yields heading north again after a period of respite.

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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