Oil rebounds, gold eyes central banks

Oil prices bounced back well at the start of the week, as choppy trading conditions were seen across various asset classes. Brent is trading back around $90 a barrel after briefly dipping back towards the lows of the last six months where we continue to see substantial support.

OPEC+ fell short of its output target by 3.583 million barrels per day in August in a further reminder to the markets of the tight conditions we continue to operate within. It also highlights how irrelevant the 100,000 barrel increase and subsequent cut really were. Still, I expect more warnings of output cuts if prices do break their six-month lows.

A troubling week for gold

It hasn’t been the best week for gold, although it did manage to find its feet a little over the last couple of sessions. Still, it could be in for a lot more turbulence this week considering the scale of tightening that’s coming on Wednesday and Thursday, alone.

If the Fed takes the plunge with a 1% hike, it could turn into a very unpleasant week for gold. It’s run into resistance around $1,680 over the last couple of sessions which makes sense from a technical perspective, being such a long-standing level of support. We may see it linger below here in the run-up to the Fed decision amid fear of a nasty rate surprise.

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