Oil rebounds, gold softens

Oil

Crude prices are rising on hopes China’s demand situation will quickly improve and on concerns that supplies will be kept tight by both Russia and OPEC. China’s reopening is coming; it won’t happen overnight, but it will provide a major boost to demand in the outlook next quarter. ​

Oil has too much support at the $70 level, which should suggest the recent change in China’s approach to fighting COVID could support a rally towards the $80 level. ​

Gold

Gold prices are settling below the $1800 level as traders await both a key inflation report and the FOMC decision. ​ Gold has had a strong performance recently as traders widely believe that inflation has peaked, while some are hoping that a soft landing is still possible. ​ The market is pricing in rate cuts next year and that is also providing some ammunition for gold bulls.

Gold should have a strong performance over the first half of next year as the Fed would not likely resume tightening if inflation remains high as growth turns negative. ​

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.