Crude prices are struggling as China stands by its zero-COVID policy and as global central bank tightening is crushing economic activity. Central banks are signaling that tightening is quickly cooling their respective economies, which means the short-term crude demand outlook will probably get slashed.
Oil is battling both a weakening global economic outlook and a surging dollar. It seems these bearish drivers won’t be easing up anytime soon and that could mean WTI crude could be vulnerable to last week’s low.
Gold
Everything seems to be going against gold right now. The Fed aftermath is leading to pain for bullion as Fed Chair Powell has signaled rates will be much higher. The peak in the dollar was potentially going to be put in place but Fed Chair Powell said they are worried more about doing too little on inflation than too much.
The yellow metal could be in trouble here as the dollar could outperform for the next month. Gold is hovering right around key support which means if prices break momentum selling could be intense. The $1600 level might not provide that much support, which means bullion prices could weaken towards the $1575 area.