Oil retreats, gold stuck in range

Are we seeing a recession being priced into oil markets?

Is oil prices getting whacked the clearest sign yet of recession fears spreading across financial markets? With equity markets, it’s been a death by a thousand cuts, as inflation panic has morphed into tightening and growth fears and finally the reality of a recession. Oil market dynamics mean crude has rallied throughout this as demand has been strong and supply insufficient. Is all of that about to change?

There’s been a clear shift over the last week and as far as I’m aware, there hasn’t been a miraculous oil discovery that solves all of the supply issues. But there’s been a far greater acceptance that a recession may be unavoidable if central banks are going to get control of inflation again. WTI is falling rapidly back towards USD 100 where it could see strong support.

Gold the outlier

It seems everything is making moves at the moment, everything except gold that is. The yellow metal is trading around a very familiar level – USD 1,840 – and showing little indication of deviating from here in any significant way. Perhaps Fed Chair Powell can spur it back to life. If not, the USD 1,800-1,870 range remains intact, as it has broadly speaking for the last six weeks.

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