Large inventory build weighs
Oil prices are a little lower again today but remain broadly within the same range they’ve traded in over the last couple of months. China has been a very bullish development for crude oil but the global economy as a whole is much more uncertain. In addition, the US decision to release oil from the SPR has come as a surprise given previous commitments to refill the reserve.
What’s more, a shockingly large inventory build reported by API on Tuesday is contributing to the decline ahead of today’s widely followed EIA report. If that’s backed up later today, we could continue to see oil drift away from its range highs.
Gold correction continues
The corrective move in gold is continuing today after the yellow metal did not get the lift from the US inflation report that some were hoping for. It’s now broken back below $1,850 and could continue lower from here, with the next support potentially coming around $1,820-$1,830, although a bigger test may come around $1,780-$1,800.
Ultimately the recent data has not been particularly favorable and that’s been evident in the shift in interest rate expectations this year. A higher terminal rate and potentially no rate cuts this year is not a good near-term development for the yellow metal.