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Oil

Oil prices are getting punished as crude demand concerns show no signs of easing. ​ The world's two largest economies are struggling here as China battles COVID and the US is seeing a significant drop in manufacturing activity.  China's new case total rose above 23,000, which is the highest level since April and is approaching its record high. ​ Fears are growing that the spread won't ease soon as cases have spread across populous regions of Guangzhou and Chongqing. ​

Some of the geopolitical risk that sent oil higher earlier this week is coming off the table. With no immediate escalation in the war in e, we could see energy traders fixate on the n crude price cap that takes hold early next month. ​ ​ ​

Inventory levels remain a key concern for the oil market so we might see limited downside from here.

Gold

Gold prices got beat up after a round of hawkish Fed speak reminded investors that the risks of the Fed taking rates above 5% are clearly there. ​ Fed's Bullard's comment that the policy rate is not yet 'sufficiently restrictive' is a big reminder that we need to see the labor market weaken significantly before we can price in the end of its tightening cycle. ​

A top has been put in place with gold and prices could soften towards the $1750 level. ​ ​ ​