Oil prices remain extremely volatile given the backdrop of huge uncertainty around Russian exports as a result of Western sanctions. Brent came within a whisker of $120 on Thursday before falling more than 8%. And that was just within European trading hours. It’s trading higher again today, up around 3%, and it’s hard to imagine that it’s peaked. We could well be heading for recessionary oil prices.
We keep hearing that a nuclear deal between the U.S. and Iran is close, but another day passes without an agreement. A deal would bring around 1.3 million barrels per day back to the market quickly, which would go some way to alleviating the imbalance. Unless, of course, Russia weaponizes oil exports in response to Western sanctions, something that still looks unlikely at this stage. It could soften the blow of unintentional disruptions though and perhaps take some of the heat out of the market.
Gold Remains In Demand
Gold saw some profit-taking around $1,950 again ahead of the payrolls report but it’s clear that there’s plenty of support for the yellow metal. Uncertainty, recession-fears, and high inflation tick all the boxes as far as gold is concerned and there’s little to suggest any of those things are going to improve in the near term.
The U.S. dollar pared gains on the back of the jobs report, which gave gold a bit of a boost. It remains a little short of $1,950 but there’s no shortage of momentum. Gold is the ultimate safe haven and there’s plenty of demand for those at the minute.
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