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Oil dips after more gains, gold flat


Oil pulls back after almost hitting USD 120

Oil prices are slightly lower, entirely giving up earlier gains that amounted to more than 5% at one point. Brent peaked just shy of USD 120 which is a level that’s been talked about a lot in recent weeks but perhaps many won’t have expected to see so fast. The sanctions against Russia have been severe and the consequences are evident already, even if they were meant to shield exports of oil and other key commodities.

What we’re probably seeing here is some profit-taking because the price has risen so far so fast.  I would be surprised if upward pressure on oil prices doesn’t resume unless something fundamentally improves. That could temporarily come from a nuclear deal with Iran. But even this would not be enough to offset a disruption to Russian exports.

Gold flat but could have further to rise

Gold is flat on the day after giving up earlier gains. It peaked at around USD 1,950 earlier in the week and we seem to have seen some profit-taking since. The sanctions sent shockwaves throughout the markets and gold benefited from the impact on commodity prices as well as the safe haven surge.

I expect it will still see plenty of support over the coming weeks unless something significantly improves in Ukraine which, sadly, isn’t looking likely. We’ve seen what impact supply disruptions have had on inflation globally over the last year and the sanctions on Russia could significantly impact many commodities whether they’re designed to or not which should continue to support gold for now.

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

This article 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 Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

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.

Craig Erlam

Craig Erlam

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