Oil steady as traders eye OPEC+ meeting
Oil prices are also steady today, a common theme as we make our way through the various asset classes. Brent and WTI bounced back strongly following the US-led SPR release this week, a move that was heavily priced in and failed to get pulses racing.
Some are speculating about a possible retaliatory move from OPEC+ when it meets next week but such a move would seem rather unnecessary when prices remain very high. The group doesn’t want to align itself with the greedy manipulator tag some have tried to apply to them. They don’t need to involve themselves in the politics of it all and I’m sure consuming countries will be hoping they opt not to. If this does turn into a price war, there will only be losers, albeit to a lesser extent on the producer side.
Gold fragile after consolidating below USD 1,800
Gold has settled below USD 1,800 in recent days, after being pummelled by more hawkish interest rate expectations ahead of the December meeting. Faster tapering and multiple rate hikes next year have ruined gold’s appeal. Yes, we still have high inflation but now it seems the central bank intends to do something about it. It was good while it lasted for the yellow metal.
Gold has found some support around USD 1,780 but it’s looking fragile and the pressure could mount once more when the US returns next week, if not sooner. This is around the 50% retracement level of the August lows to the November highs which may be why we’re seeing some support at the moment. But I don’t think this is a retracement which is why it will eventually break, and the 61.8 fib below around USD 1,750 may be a more fitting temporary bottom if it does consolidate ahead of the December FOMC meeting.