Oil dips as Iran/US talks progress
The oil price rally has hit a tentative wall as Ukrainian tensions cannot overcome the prospects of additional Iranian supply and possibly more crude output from OPEC+. Yesterday, Iran Foreign Ministry spokesman Khatibzadeh noted that significant progress has been made in reviving the 2015 nuclear deal. Energy traders are looking at a long list of geopolitical risks and see the Biden administration being extra motivated to make a deal with Tehran.
Crude prices still seem like they have a good chance to make a run towards the USD 100 level, but it might take a major escalation by Russia for that breakout to happen. The deployment of Russian troops to two regions in Ukraine and prospects of various sanctions against Russia will likely lead to further tense moments in the coming days.
Whatever dips happen with crude prices will likely be short-lived.
Gold
Gold is having a great month as investors scramble for both safe-havens and inflation hedges. Russia-Ukraine tensions continue to intensify and that is driving a massive move across commodities. The likelihood of a regional war seems high and that will likely keep inflationary pressures elevated for much of the year. Bullion seems like it is taking a little break right now, but investors will soon be saying, “I love gold” as geopolitical and growth concerns will drive safe-haven demand.
Gold has tentative resistance at the USD 1920 level, but beyond that lies the USD 1950 area.
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