Oil prices stable, gold under pressure
Oil stable after rising inventories
Oil prices are treading water after Wednesday’s rally that came on the back of EIA inventory data. The surprising and substantial decline alongside record crude exports provided a boost just as the price was testing multi-month lows. There are many factors at play right now and we could see traders taking a more cautious approach given the proximity of a decision on the Iran nuclear deal.
There remains a lot of doubt that it will cross the line, but if it does, it could be the catalyst for another drop and possibly even take the price to levels not seen since before the invasion.
Gold in trouble amid resurgence of dollar
Gold is a bit higher after slipping again on Wednesday. It failed to secure a sustained increase in Fed minutes as the dollar quickly recouped its initial losses and wiped out any gains for the yellow metal. The US 2-year isn’t too far off its recent highs and the 10-year has also been making moves higher over the past couple of days, which may continue to put pressure on gold.
The reversal remains in play, however, which means that there still seems to be a disconnect between what bond traders expect and what equity traders do. If the recession narrative begins to weigh more heavily on financial markets, gold could make another run to $1,800 and perhaps even be more successful this time.
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