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Oil range-trading, gold slips lower

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Large inventory build weighs

Oil prices are a little lower again today but remain broadly within the same range they’ve traded in over the last couple of months. China has been a very bullish development for crude oil but the global economy as a whole is much more uncertain. In addition, the US decision to release oil from the SPR has come as a surprise given previous commitments to refill the reserve.

What’s more, a shockingly large inventory build reported by API on Tuesday is contributing to the decline ahead of today’s widely followed EIA report. If that’s backed up later today, we could continue to see oil drift away from its range highs.

Gold correction continues

The corrective move in gold is continuing today after the yellow metal did not get the lift from the US inflation report that some were hoping for. It’s now broken back below $1,850 and could continue lower from here, with the next support potentially coming around $1,820-$1,830, although a bigger test may come around $1,780-$1,800.

Ultimately the recent data has not been particularly favourable and that’s been evident in the shift in interest rate expectations this year. A higher terminal rate and potentially no rate cuts this year is not a good near-term development for the yellow metal.

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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