Oil Paring Gains Again
Oil prices are dropping for a second day, erasing some more of the pre-Christmas rally amid uncertainty over the Chinese outlook and the limited impact of Russia’s response to the G7 price cap. Volatility is likely going nowhere fast as we navigate another highly uncertain year, albeit one that surely promises plenty of surprises and twists and turns along the way.
The US refilling the SPR should be supportive for the market and could have put a bit of a floor in place, although with so many moving parts, I don’t think anyone can say anything with any strong degree of conviction. OPEC+ could announce at any point, and suddenly everything could change. Not to mention Russia’s war in Ukraine and how that develops.
Gold Settling Around $1,800
Gold is continuing to hover around $1,800, where it has traded roughly $30 on either side throughout the bulk of December. Gold traders, like the rest of us, have an idea of what the Fed will do early next year but are holding back as it doesn’t align with the hawkish narrative from the central bank. Patience may be key on that front, but with momentum running thin, the prospect of a correction is growing.