Oil moves higher
Oil was making a comeback as energy traders focused on tightness in the diesel markets, shifting the focus back to Russian energy supplies and the rising danger of nuclear war in Ukraine.
Earlier crude prices got a boost after China’s PBOC stepped up efforts to calm markets and as energy traders awaited China’s mass COVID testing results, which could lead to even more lockdowns.
The oil market priced in enough demand destruction from China and crude prices should start to find strong support around the USD 100 level.
Gold
Gold prices were trying to find support now that China’s PBOC was stepping up efforts to support the economy and as the move higher with yields continued to show signs of exhaustion.
Gold investors were hoping prices could hold the USD 1900 level heading into next week’s FOMC decision, but if risk aversion remains the dominant theme, that won’t happen.
Gold was trading more like a risky asset right now than as a safe-haven and that left it vulnerable here. If the war in Ukraine sees further escalations, that could be the catalyst to send prices sharply lower.