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Oil flat, gold steady ahead of US holiday

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Oil flat after SPR move

Oil is looking a little flat today after bouncing back well on Tuesday following the coordinated SPR announcement. Oil consuming countries fighting back makes for an interesting story and may score Biden some much-needed political points ahead of the midterms but as we’ve seen from the market reaction, it’s certainly no game-changer.

And I’m not convinced it was ever intended to be. The decision has ticked a few boxes and if they’ve played it well, won’t ruffle too many feathers within OPEC+ and trigger a response. They still hold all the power and could quite easily counter. Rather than engage in a price war though, I wonder if the group will allow them this small win and move forward as planned as prices remain elevated.

Gold finds its feet ahead of US data

Gold has been pummelled this week but it appears to finally be finding its feet a little ahead of today’s feast of US data. The yellow metal had benefitted greatly from a combination of higher inflation and central bank pushback but the readjustment in interest rate expectations in the markets has brought it back down to earth with a bang.

There could still be plenty of action ahead today given the quantity of data and the Fed minutes ahead of the US holiday when gold will find its feet once more. But how it performs into year-end will ultimately depend on whether the Fed falls in line with market expectations next month.

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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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