Oil Bounces Back, Gold Slips After CPI Report
2023.06.13 16:13
Oil Bounces Back Amid More Favourable Developments
prices are staging a comeback today, perhaps buoyed by the softer data which may open the door to the end of the Fed’s tightening cycle and enable the soft landing it always hoped for. That said, there may be a technical element to it as well, with the price having traded around its 2023 lows in the run-up to the release.
There was always likely to be two bullish cases for crude and this only slightly aids one of those. Another unified move from OPEC+ could have been that but instead, the Saudis were forced to go it alone. The other was a stronger economy which has looked increasingly unlikely recently but positive inflation reports from the US and eurozone and a rate cut in China certainly help that case. There’s still a long way to go.
Gold Traders Seemingly Not So Upbeat
isn’t aboard the Fed pause train yet though, in fact, it slipped after the inflation report which may suggest not everyone is on the same page. This may be a reflection of the still stubborn core inflation number that while enabling no more hikes could keep rates higher for longer. But clearly, what the Fed does and says tomorrow could play a big role in whether we see a breakout from the range gold has traded in over recent weeks. Based on today’s response, traders may not be feeling so upbeat. The question is will the Fed change that or compound those fears?
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