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Oil pushes higher, gold slides after FOMC

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Oil shakes off sentiment hit

Oil is continuing to push higher as traders price in a modest economic impact from omicron. The OPEC+ meeting this week supported the view and the price of oil is now not far from its October peak, with WTI closing in on USD 80 for the first time in almost two months.

The knock to broader market sentiment from the Fed minutes is not reverberating around the crude market, with prices up more than 2% on the day and backed by momentum.

Gold hit hard by Fed minutes

Gold’s recovery in late December appeared to be built on rocky foundations and the Fed minutes delivered a hammer blow to hopes of sustaining a move above USD 1,800 in the near term.

Aside from the references to balance sheet reduction, which at this point are merely an option up for discussion, there was nothing in the minutes that wasn’t clear after the meeting. Slightly higher yields are a normal response to the balance sheet discussion but the level of risk aversion seen across the markets is not.

The yellow metal has slipped further today, off more than 1%, and we could see the pullback gather momentum.

Once again, resistance around USD 1,833 has got the better of gold. It appeared to have finally broken the barrier in November but it wasn’t long before it came crashing down once more and the last week has shown it remains as much a barrier now as it did before.

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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