Oil recovers, gold under pressure

Oil higher as natural gas prices slide

Oil prices are recovering at the start of the week following a brief pullback last week that appears to have quickly run its course. It was always likely that dips were going to attract interest but to be so close to last week’s highs already is quite impressive.

Especially coming on the back of reports that China has released gasoline and diesel reserves in a bid to keep regions well supplied and prices stable. Not to mention the softer PMI data over the weekend that pointed to ongoing challenges for the economy. This is clearly a very bullish market, still.

It seems quite clear that traders are not expecting any action from OPEC+ this week considering their conclusions last month and comments since. The group is clearly perfectly happy with price levels and don’t consider them the economic risk that other countries, like the US, do. This week’s meeting will likely be swift and consistent with the last, we stay the course.

One thing that could have dragged on prices is Vladimir Putin’s surprise announcement that he has ordered Gazprom to start filling European storage facilities as the company nears its targets in Russia. Natural gas prices have fallen heavily in recent days and are lower again today which could have weighed a little on oil, given how it’s been a supportive factor in the rally. If only there was a way for Europe to return Putin’s goodwill gesture.

Gold support buckling?

Gold is rallying on Monday after once again failing to end the week above USD 1,800. Prices tumbled on Friday after such a strong recovery in the dollar which is marginally lower today. Higher yields continue to be a massive downside risk for gold, despite it showing incredible resilience so far, but that will likely continue to weigh.

In terms of the key levels, little has changed on that front. A close above USD 1,800 would be encouraging but resistance lies around USD 1,810. If it can overcome that then the real test comes around USD 1,833 where it has repeatedly failed. Another failure to do so and USD 1,770 is key to the downside and further pain could follow.

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

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.