Oil removal ends, gold stabilizers

Oil

Energy traders are bullish on oil prices again as China’s COVID situation shows signs of improvement and after the dollar eased following a hot inflation report that n Little has changed near-term Fed rate hike expectations. The oil market cannot justify oil prices below USD 100 given the potential shock that will occur once the EU is able to move forward with its ban on Russian crude.​ ​

WTI Crude tentatively pared gains after the EIA’s Crude Oil Inventories report released a surprisingly large build with inventories. This report was full of surprises as U.S. production fell 100,000 bpd, the first drop since January.

The oil market seems to have made up its mind and it will focus on tightening supply and not on the eventual destruction of demand that could occur later this year.

Gold Slips After CPI Report

Gold prices fell as the dollar jumped on the back of a hotter than expected inflation report that will likely force the Fed to impose more tightening than it initially thought. Today’s inflation report proves Fed Chair Powell made a mistake last week by removing the option of a 75 basis point rate hike at the next policy meeting . The general conclusion for much of Wall Street, however, is that the Fed is still poised to offer back-to-back half-point rate hikes at the June and July FOMC meetings.

Gold gave up the majority of its gains after the inflation report, but found massive support around the $1830 level, where the 200-day simple moving day resides. Gold was poised to show signs of stabilizing as many investors hoped for a sharper deceleration in price pressures, which was believed to pave the way for the dollar to pull back and spike with rising yields. of the Treasury.

Gold is tentatively holding at the $1830 level and should continue to stabilize, but that could be tested if a steady flurry of Fed talk raises market expectations for more aggressive tightening later this year.

This article is for general information purposes only. It is not investment advice or a solution for buying or selling securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for everyone. You could lose all your deposited funds.

With over 20 years of trading experience, Ed Moya is a senior market analyst at OANDA, producing up-to-the-minute cross-market analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. . His particular expertise spans a wide range of asset classes, including currencies, commodities, fixed income, equities and cryptocurrencies. During his career, Ed has worked with some of Wall Street’s leading forex brokerages, research teams and information services, including Global Forex Trading, FX Solutions and Trading Advantage. Most recently, 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 and Sky TV. His opinions are endorsed by the world’s most renowned news agencies including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.

Ed Moya

Ed Moya

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