Oil steadies, gold has firm support

Oil stabilises as OPEC expresses concerns

Oil prices are a little flat after spiking higher on Wednesday in response to apparent storm damage on the Caspian Pipeline Consortium (CPC) that will affect around a million barrels per day from Kazakhstan for up to a couple of months. Coming at a time when the market is already extremely tight, it could ensure prices remain higher and vulnerable to further increases.

OPEC has reportedly expressed its unease to the EU regarding a proposed ban on Russian oil. In much the same way that Western leaders have had their requests for additional oil production overlooked in recent months as prices have surged, I can’t help but think OPEC’s concerns will fall on deaf ears. I guess we’ll soon see just how strong the OPEC+ alliance is.

Gold higher amid commodity surge

Gold is creeping higher again, adding to yesterday’s gains which came in risk-averse trade. The yellow metal remains well supported against the backdrop of high inflation and commodity price surges, not to mention waves of risk-aversion in these highly uncertain times.

It ran into some resistance around USD 1,960 earlier in the session before pulling back to trade around USD 1,950. It’s given back a lot of the gains secured earlier this month as traders sought the shelter of a reliable safe haven and inflation hedge amid the Ukraine invasion and sky-rocketing commodity prices. But it’s seen firm support around USD 1,900 even as risk appetite has improved. Upside may be slow as a result of this but equally, I expect this support to remain firm in the absence of significant progress in ceasefire talks.

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Craig Erlam

Craig Erlam

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.
Craig Erlam