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Oil Rallies, Gold Vulnerable

Published 08/11/2022, 03:33 PM
XAU/USD
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GC
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NG
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Oil 

Crude prices are rising after demand destruction fears have become overdone. Nationwide gas prices are now below $4 a gallon, and that should definitely provide some relief for what has been a lackluster summer driving season. ​ The economy is in too good shape for further crude demand destruction to occur, and that should keep oil prices supported well above the $90 level.

The IEA is noting that global oil demand growth will continue as oil consumption will benefit from new demand as elevated natural gas supplies. The oil market still looks like it will be very tight over the next year, even if it does dip into a surplus this quarter.

Gold 

Gold prices are declining as the bond market selloff returns as investors may have become too optimistic about a Fed pivot. ​ Gold needs to see more data in the next couple of months to confirm that inflationary pressures are moderating.

The yellow metal looks a little vulnerable here, and momentum selling could drag prices towards the $1780 level. ​

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