Oil slides, gold under pressure

Oil slides but remains in range

We’re continuing to see oil prices fluctuate, although recent choppiness has occurred largely near the upper end of their range since early December. Brent and WTI are on the decline on Friday, matching up with overall risk appetite in the markets but broadly speaking, little has changed.

One major upside risk to prices remains China and its recovery from the transition to living with Covid. Russian output remains another, following reports that its output will fall by half a million barrels per day from March as a result of the price cap. Some suggest that could double later in the year. There are downside risks, of course, not least a slower global economy as a result of much higher interest rates. But for now, traders seem content with it remaining in the range.

Warm weather has enabled gas prices to continue drifting lower, albeit at a slower pace after falling back to pre-war levels. European gas stores remain strong as a result, although that could shrink over the remainder of the winter.

Another setback

Thursday’s PPI numbers were the latest setback for gold, coming on the back of the red-hot jobs report, stubborn CPI data, and strong retail sales. Gold has fallen around 7% over the last couple of weeks and it appeared to be stabilizing around $1,820-$1,830 on Thursday.

It’s trending lower once more today though, off almost 1% but there isn’t an enormous amount of momentum at this point. We could see it consolidate around here or even pare losses, although a break of $1,820 could see the sell-off intensify again with $1,780-$1,800 being the next major test.

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 info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

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.