Gold extends losses, oil pares gains

Time for some profit taking in oil?

Dollar strength could be quite the headwind for commodity markets which have been red hot recently.

The vaccine news has turbo-charged the rally and oil has had an extra kick from the actions of OPEC+. With so much good news priced in and near-term risks piling up, it wouldn’t be surprising to see some profit taking kick in.

That’s not to say I think oil prices will fall heavily, not with the OPEC+ backstop in place. But after a phenomenal run in recent months, we may see it pull back a little.

Even still, crude will remain in very healthy territory, safe in the knowledge that should the situation require it, the group will act to support the market in the near-term and the vaccines in the longer.

Gold falls hard once again

After such a bright start to the year, gold has experienced a mass exodus, traders abandoning ship as yields rose and the dollar bounced back.

Just as the yellow metal was gathering some momentum, it reversed course sharply, smashing through $1,900 once more in spectacular fashion.

Gold found some support around $1,820 but continues to look vulnerable after such heavy selling. It could be a pivotal week for gold, with so much Fed speak in the coming days.

Should policy makers opt against talking down the rising yields, or just fail to convince, gold could be in for more tough days, with the late November lows potentially in sight.

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.