Oil edges higher as OPEC revises down demand
OPEC pared back its demand forecasts for the final quarter of the year in its monthly report, with higher prices at least partly responsible for the change. Demand was revised down by 330,000 barrels per day to 99.49 million which means it will take an extra few months for it to get back to pre-pandemic levels.
The group also expects US shale to ramp up production more than previously as higher prices encourage further investment. Whether the acknowledgment of higher prices affecting economic activity and demand will encourage the group to increase output more at an upcoming meeting is another thing, especially with some struggling to meet output targets as it is.
Inflation hedge gold continues to rally
Gold is continuing to rally on Thursday, adding to gains the day before when it surged following the inflation report as traders sought out an old friend in the face of higher inflation. They also briefly sought out a new companion as it appeared the bitcoin hedge narrative was finally sticking, although only one held on.
Perhaps this is the clearest sign yet that traders are losing patience with, or faith in, the Fed as inflation hit a 31-year high. It’s not often that gold rallies alongside yields and the dollar but markets are pushing for rate hikes and may be fearful of the Fed waiting too long to deliver.
Gold is back in early summer territory and the next test now falls around USD 1,870. It appears to be building momentum once more though so the real challenge is the region between USD 1,900 and USD 1,920, where it struggled six months ago. If the Fed can’t get traders back on board, it could continue to build momentum.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at firstname.lastname@example.org. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.