Oil hovers around $100
A second weekly decline in oil prices has eased some of the pressures on the global economy going forward, thanks to a combination of factors, including huge SPR releases and Chinese lockdowns. Still, prices are very high at around $100 a barrel, and there remain significant upside risks going forward.
How prolonged and widespread Chinese lockdowns become could be a key factor in the short-term, with it being such a large consumer and some cities with very few cases already imposing harsh restrictions. The zero-Covid approach in Beijing could weigh heavily on economic activity, hoping that a quick eradication can once again see it rapidly spring back. If not, it could help keep a lid on oil prices.
Gold consolidates further
Gold is trading around the same level it was yesterday, the day before that, the day before that, and so on. Even though the spike in volatility seen elsewhere this week as a result of the hawkish Fed shift, gold has been unmoved. We continue to see consolidation in the yellow metal, with the daily ranges tightening rather than widening as you may have expected. There are multiple forces at play here, but traders are seemingly clinging to their traditional inflation hedge and haven.