Oil Decline Continues, Gold in Choppy Waters
2023.04.21 08:23
Was OPEC+ correct to cut production as the price tumbles once more?
prices are slipping further at the end of the week and looking increasingly likely to close the post-OPEC+ gap. The gap a few weeks ago came after the cartel announced a surprise output cut over the weekend triggering a gap open on Monday. The price has since fallen back within this on the back of weaker industrial activity and manufacturing PMIs this morning have further compounded that pressure.
It would appear that, as we saw in October, OPEC+ pre-emptive action may have been taken on accurate assumptions on the economy and demand and will not propel the price back above $100. That’s not to say the price at the time wasn’t a motivation for a proactive move, rather than waiting for the data to warrant it, but we may now be seeing evidence in the price that markets agree with its assessment, with it now back in the pre-announcement range. came very close to closing the gap earlier in the session today and may still do so soon enough.
Traders in no mood to give up on gold at the moment
remains choppy as we near the end of the week, slipping around 1% today and back below $2,000. Uncertainty over the path of interest rates, which should become much clearer over the next month or two, is driving the indecision we’re seeing in gold at the moment.
Higher yields in recent weeks have stalled the rally toward record highs but traders are clearly in no mood to give up on the yellow metal. As things stand, dips are being bought and it will be interesting to see if we see the same on this occasion as well. Big support remains around $1,940-$1,960.
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