Oil Prices Rise On China, Gold

Republished By Plato

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China rumours boost oil prices

Oil prices are rallying once more at the end of the week as rumours continue to circulate around China’s plans to relax certain Covid restrictions in the first major move away from its zero-Covid policy. Of course, this is pure speculation at the moment and yesterday’s denial from the National Health Commission appears to have fallen on deaf ears but that doesn’t appear to have stopped oil rallying. Stocks in China and Hong Kong aren’t doing too badly either.

Of course, there remain two dominant forces in the oil market right now, the economic outlook and OPEC+. We’ve seen more gloomy forecasts this week, with the BoE suggesting the UK could face a two-year recession. While others may not be as bad, global growth prospects remain weak. Oil has been climbing over the last few weeks but ultimately remains roughly in the middle of the $90-$100 range.

Tentatively higher

Gold is trading tentatively higher on the final day of the week after testing the September and October lows on Thursday. The yellow metal was dealt another blow by the Fed’s admission on the terminal rate but appears to be clinging on for now. A hot jobs report today could be the final nail in the coffin, with support around $1,620 coming under serious pressure. Below there, $1,600 could be key.

But the gains we’re seeing so far today are impressive, if not a little surprising. Following Wednesday’s setback, a rally of more than 1% in the run-up to what could be another red-hot jobs report is certainly bold. Should it break $1,680 in the aftermath, it could signal that a relief rally is underway.

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.

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.