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Oil edges higher, gold steadies

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Oil range tightening is perhaps a sign of a coming breakout

Oil prices are edging higher on Thursday, continuing to recover from the lows earlier this week when Brent briefly breached USD 100 again. Ultimately, we’re continuing to see consolidation in crude markets, with the range tightening and potentially setting us up for a volatile breakout in the coming weeks.

The same factors remain at play here and could be the catalyst for an eventual breakout, be it further Chinese lockdowns, slow output growth from OPEC+, new supply disruptions, larger reserve releases etc. Or, of course, an escalation in tensions between Russia and the West, leading to an immediate embargo. The Kremlin has taken us down that path in the natural gas space, imposing rouble demands on buyers that have led to Poland and Bulgaria being cut off. The stand-off could spill over into oil markets.

Gold steadies after recent dive

The slump in gold appears to have slowed today after hitting a low around USD 1,870. The strength of the dollar over the last week has been a real drag on the yellow metal which has seen a dramatic change in fortune since rallying close to USD 2,000 earlier this month. With the dollar continuing to see such strong support in these turbulent times, the yellow metal may remain under some pressure. The break of the mid to late March support isn’t ideal and the next big support falls around USD 1,850.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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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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