Oil slumps, gold lower on strong dollar

Oil

Crude prices edged lower as a section of the Keystone pipeline restarted and as global recession risks increased after a wave of central banks delivered another strong round of tightening. Oil’s recent rally is running out of steam as risk aversion runs wild. ​ The dollar might be poised to rally here and that should keep some pressure on oil prices.

Gold

Gold is weakening as markets worry that global central bank tightening will drive recessionary fears and keep the dollar supported here. ​ Traders are still digesting all the Fed and ECB actions and that should ultimately still have a little room for rates to rise but the peak is getting close to getting priced in.

Gold’s decline below the $1800 level triggered technical selling that stalled out just before the $1780 region. Gold will eventually resume its safe-haven status, but first we need to see more traders convinced that the Fed won’t follow through with their hawkish threats.

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.

Ed Moya

Senior Market Analyst, The Americas at OANDA

With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.

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