Oil’s early boost from a weakening dollar could not last as energy traders debate whether optimism was premature over an easing of COVID rules in China. Chinese officials continue to push back on the idea that a relaxation in COVID rules is coming. Crude prices still seemed destined for a move above the $100 a barrel level but that might have to wait until we see a clear peak in cases. China’s COVID cases are at a six-month high and that might support holding onto their zero-COVID policy a little while longer. A China reopening is coming but no one can say for sure when that might happen.
Gold Gains as U.S. Dollar Dips
Gold prices are higher as dollar weakness returns ahead of the midterm elections and a pivotal inflation report. The best-case scenario for gold is for a Republican sweep and further signs pricing pressures are easing. Gold looks like it will closely track the dollar and that means it will hinge on this week’s inflation report.
Leading up to the key inflation report, gold seems poised to form a trading range between the $1660 and $1690 zone.