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Oil and gold both take a tumble

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Oil

Crude prices are sliding as the dollar rallies on bets that the Fed might not be tightening. ​ Good news for the economy is now bad news for the crude demand outlook as economic resilience will force the Fed to kill the economy. Oil is becoming an easy trade, as it will track the dollar and not so much anything else. If China’s economic momentum returns that should help stop the dollar strength we are currently seeing.

Gold

Gold has lost its luster as debt ceiling deal momentum continues and recession fears ease. ​ King dollar’s return has also been a drag for gold and that reign might last a while longer. ​ Gold should find some support around the $1950 region, but if that breaks it could get ugly fast. Despite all the optimism with debt ceiling negotiations and some stability with the regional banks, the demand for safe-havens is quickly evaporating.

Gold might struggle to muster up a rebound if we don’t see a major setback in debt deal talks or if we don’t have a new risk to the outlook emerge.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.
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