Gold soared and oil fell
2023.01.04 13:49
Gold soared and oil fell
The dollar has risen as a result of risk aversion, which has lowered expectations that the outlook for crude demand will improve in the near future. China’s resuming has too many question marks as clinics are overpowered and clinical supplies run short.
Due to investors’ inability to pass up the yield they are receiving from fixed income, crude prices may struggle in this area due to the strong dollar. Global manufacturing activity appears to be mostly stuck in contraction territory, which may not improve until the quarter’s end.
As recession risks rise and jewelry demand in China and India improve, gold is riding a nice wave of falling Treasury yields and safe-haven flows. Given that most of Wall Street is on the defensive, gold should have a strong start to the year. Given that sellers on the stock market appear to be clearly in control, the precious metal should see significant inflows.
Inflation may prove to be more difficult to control, increasing the likelihood that the US economy will experience a recession that is harsher than most people anticipate. The Federal Reserve will continue to make it abundantly clear that reducing inflation will require a lot of effort.
At $1900, gold faces significant resistance, but it may be tested before the quarter’s end.
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