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Oil Rises, Gold Faces Key Resistance

Published 01/17/2022, 01:50 PM
Updated 07/09/2023, 06:31 AM

Oil prices are edging higher again at the start of the week as it continues its remarkable run since bottoming in early December. It’s up more than 30% over that time and there still appears to be momentum in the move. Kazakhstan has seen its output return to pre-unrest levels, but that’s done little to slow the rally in recent sessions.

Ultimately, it comes down to the ability of OPEC+ to deliver the 400,000-barrel-per-day increase that it has vowed to do each month. The evidence suggests it’s not that straightforward and the group is missing the targets by a large margin after a period of underinvestment and outages. That should continue to be supportive for oil and increase talk of triple-figure prices.

Can Gold Break Key Resistance?

Gold is marginally higher on the day after pulling back again late last week. The yellow metal has repeatedly struggled at US$1,833 and it would appear it’s having the same struggles this time around as well. It did finally break through here in November, but it didn’t last and it seems the psychological barrier is as firm as ever.

That said, it’s impossible to ignore gold at the moment as it continues to rally despite more and more rate hikes being priced in around the world and yields rising in tandem. There could be an argument that we’re seeing safe haven or inflation hedge moves due to the current environment, which could become more clear over the coming weeks.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Latest comments

Despite the forcasted rate hikes, fed already put too much currency in circulation, which won't be recouped altogether. Inflation fear won't go away and will be realized.
Biden driving oil up. Liberal policy making me rich. Looking for 125 a barrel due to war on oil and weak foreign policy! Lets so this!!
100 a barrel before the beginning of summer
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