Oil prices rebounded slightly on Thursday, up almost 1%, after collapsing more than 5% a day earlier on renewed global growth concerns.
With policymakers worldwide still hawkish on interest rates, most notably in the US and China, locking down major cities in its zero-tolerance fight against Covid, the demand outlook is weakening.
After such a long period of supply driving the crude price, demand appears to dominate, with traders anticipating a slowdown, maybe even a recession, next year.
I can only imagine how OPEC+ is taking the recent price moves, with its warnings and token cut seemingly falling on deaf ears. An emergency meeting may be on the cards ahead of its scheduled October gathering.
Gold Recovers As Dollar Pares Gains
Gold enjoyed a little reprieve on Wednesday as yields pared recent gains and the dollar pulled off its highs. I’m not sure we should get too excited about gold’s resurgence just yet. It’s already slipping a little today.
The rebound means crucial $1,680 support continues to hold for now, but given the backdrop of hawkish central banks and immense market uncertainty, I’m not sure traders are ready to abandon the dollar just yet.
That said, it will be interesting if gold can manage to catapult itself back above $1,730, as that would suggest – in the short term, it has found some favor in the markets.
With a double bottom perhaps forming in gold, a break of $1,730 could indicate a much more significant corrective move, even if the longer-term trend is still very much against it.