Oil Slides Over OPEC, Gold Falls After FOMC Minutes
2023.05.26 03:56
Russia cools talk over OPEC+ output cut
prices are sliding again on Thursday after the Russian Deputy Prime Minister, Alexander Novak, appeared to cool expectations of an imminent output cut from OPEC+ ahead of the meeting in a little over a week.
Suspicions of a second consecutive cut came as prices slipped, and remained, below $80 a barrel – the point at which the group announced a surprise cut previously – and Saudi Energy Minister, Prince Abdulaziz bin Salman, warned short speculators to “watch out”.
It would almost be more damaging to make those threats and not follow through and perhaps Novak is playing a role in the elaborate scheme to punish short-sellers, but the comments suggest there isn’t widespread support for another cut so soon after the last. That wouldn’t prevent Saudi Arabia from unilaterally enacting a cut but it would make it less effective.
Gold slips further following FOMC minutes
A stronger dollar and higher US yields have pushed into the red once more today, driving it back below technical support at $1,960 and signaling a deeper correction is on the cards. Another rate hike over the next couple of Fed meetings is now deemed more likely than not which has driven the latest strength in the dollar and gold is paying the price.
The yellow metal could now be facing further losses following the break of that support level, with technical support then coming around $1,940 and $1,900 being the next psychological barrier. US inflation, income, and spending data on Friday could be the next big catalyst for gold, in the absence of any shocking Fed commentary.
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