Oil volatile after a week of mixed news, bad news on US inflation for gold
Oil markets are volatile ahead of next weekend’s OPEC+ meeting
Oil prices rebound slightly after a volatile week amid conflicting comments from key members of the OPEC+ alliance. From a “caution” warning from the Saudi energy minister to a suggestion that the company will not cut production next weekend, traders have been a little confused about what to expect.
Saudi Arabia may want to keep traders on their toes, but making these comments and not acting on them could be perceived as weak and cause prices to fall again. A unilateral action might not pack the same punch as a group attack, even if you wouldn’t give them credit for it.
Gold suffers from stronger US inflation numbers
Gold pared losses at the end of the week but still appears vulnerable to further declines on less favorable data. US inflation, income and spending data were another hit, pointing to greater economic resilience and more persistent price pressures. It’s a common theme this week and a concern for policymakers who have been hoping they could ease the brakes after a grueling tightening campaign.
The yellow metal broke below $1,960 on Thursday, marking a loss of key technical support before attempting and failing to break back above it today in what could be seen as a confirmation of the initial move and a bearish signal. If the price continues to trend lower, $1,940 could represent an interesting support level, while $1,900 then represents a notable psychological level.
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Craig Erlam is based in London and joined OANDA in 2015 as a market analyst. With years of experience as a financial markets analyst and trader, he focuses on both fundamental and technical analysis while providing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he is also a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig is a full member of the Society of Technical Analysts and is recognized as a chartered financial technician by the International Federation of Technical Analysts.