Oil testing post-OPEC+ gap open
Oil prices are off almost 2% today and earlier tested the gap open from a couple of weeks ago. That came on the back of the surprise weekend OPEC+ output cut which propelled the price back towards the highs of the previous few months, where it has since hovered around.
Today’s sell-off comes on the back of some selling pressure yesterday following the Chinese industrial production data and slightly more hawkish expectations on interest rates. In the UK that refers to the higher terminal rate we’re now seeing while elsewhere like the US, it’s fewer rate cuts later in the year. A significant break of $79 in WTI could be very interesting, with the previous Friday’s high a little below $76.
Gold corrects as investors become more hawkish on interest rates
Once again, gold’s foray above $2,000 was brief as sentiment in the markets shifted, rate expectations became more hawkish and profit-taking kicked in. That meant record highs weren’t tested on this occasion – although it wasn’t too far off – and we’re now seeing more of a corrective move in the yellow metal.
Notable support can be seen around $1,940-$1,960, with $1,900 then being the big test below that. A break of this could signify a broader trend shift and much more hawkish interest rate expectations.