Oil rally stalls as nuclear talks take a step forward
Oil prices are a little flat at the start of the week with the rally losing a little momentum after nuclear talks between the US and Iran appeared to make positive progress. It seems we’re into the final stretch, one way or another, and Biden’s decision to restore sanction waivers could signal that they’re heading in the right direction.
Biden has an additional incentive to reach a deal, given the sky-high crude prices and what a deal could do to ease the tightness in the market just before the midterms. He’s tried a coordinated SPR release and let’s be honest, it achieved very little. This could make a real difference at a time when crude appears destined for USD 100 and OPEC+ can’t hit their output targets.
Gold continuing to find support
Gold is once again pushing higher even as central banks continue to gravitate towards the market’s view on inflation. The ECB was the latest to concede defeat – or at least signal it soon will – while interest rate expectations elsewhere are rising. Even against this backdrop, gold remains in favour and has driven its way back above USD 1,800.
Whether it’s safe-haven flows or the belief that central banks aren’t doing enough to get to grips with inflation, the yellow metal is continuing to see plenty of love. The next test is around USD 1,830 where it’s struggled in the past, with the January highs around USD 1,850 then key.