Oil rises on Saudi on Russian cuts, gold moves higher

Saudi and Russian cuts no game-changer for oil

Oil prices were rising for a fourth session, with output curbs from Saudi Arabia and Russia initially giving fresh momentum to the recent recovery. The Saudis announced a one-month extension to their voluntary one million barrel cut, taking the reduction to the end of August which was swiftly followed by Russia announcing that it will cut exports by 500,000 barrels per day next month.

That the market rallied only a little over 1% on the announcements, before giving it back, suggests traders don’t view today’s decisions as a game-changer or even unexpected, when it comes to Saudi Arabia. Brent crude continues to trade in the same range, roughly between $72-$77 at this point and only a break of either of these levels will suggest something has fundamentally shifted.

Gold pares losses after a rough couple of months

Gold has struggled in recent weeks against the backdrop of persistent stubborn inflation, resilient economic data, and, as a result, higher interest rate expectations. We’re seeing it bounce back a little over the last couple of sessions after briefly dipping below $1,900 but the trend is still very much against it.

That said, we may be seeing some weakening of momentum around $1,900 which could hint at a corrective move, although a loss of momentum in itself doesn’t mean the price will suddenly reverse. A significant break below $1,900 could see it plunge again, and on improving momentum, but after falling almost 9% since early May, a correction could make sense.

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

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