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Oil and gold climb on Ukraine conflict

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Oil soars as sanctions bite and the conflict intensifies

Oil prices are surging once more as the conflict in Ukraine intensifies, the West continues to impose severe sanctions and companies turn their backs on what is becoming an increasingly isolated Russia. We’re starting to see what impact these sanctions could have on Russian oil exports and the challenges they pose and that’s driving the price higher.

The oil rally has seriously accelerated today, breezing past USD 100 and gathering momentum along the way. That’s despite the US once again leading discussions around a coordinated release of oil reserves of around 60-70 million barrels, which is clearly doing little to calm the nerves. We saw an underwhelmed reaction when this happened in November as well and that was before Russia invaded Ukraine.

Safe-haven gold continues to move higher

Gold is rallying once again in risk-averse trade as Russia’s assault on Ukraine intensifies. Sentiment in the markets has been deteriorating throughout the session and the price of gold is rising alongside that. It also comes as the price of oil has soared again today, adding to the inflationary pressures being experienced around the world.

The safe haven and inflation hedge appeal is driving plenty of support for the gold price and it’s now back above USD 1,930 and could have its sights set on USD 1,950 in the near-term. Beyond this, USD 2,000 suddenly looks very achievable again as nothing we’re seeing in Ukraine, or in negotiations at the border, gives the impression that the end is in sight, sadly.

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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.
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