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OPEC+ expected to deliver massive output cut, gold shines

Started by PocketOption, Oct 05, 2022, 06:35 am

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PocketOption

OPEC+ expected to deliver massive output cut, gold shines

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Oil fireworks?


An in-person OPEC+ meeting means get your popcorn ready and prepare for some fireworks. Energy traders are pumping up crude prices ahead of the OPEC+ meeting as expectations are high that they will deliver the biggest reduction in output since the beginning of the pandemic. ​ This will be the first in-person meeting since 2020, which means they will probably go big here and deliver a cut of more than 1 million bpd.


Despite everything going on with the war in e, OPEC+ has never been this strong and they will do whatever it takes to make sure prices are supported here. ​ Both the Americans and European leaders will not be happy with this action as both their respective outlooks clearly have a downward trajectory and would benefit with falling crude prices.


Gold


Gold prices are rising as investors embraced a soft manufacturing reading that suggests the Fed will not need to remain super-aggressive with the tightening of monetary policy. ​ A new month has Treasury yields in freefall, which is great news for bullion. ​ Downward pressures on inflation are growing and that should put a top on Treasury yields for now.


Gold might have tentative resistance at the $1700 level, but if bullish momentum remains strong prices could easily make a run towards the $1740 region. ​ ​ ​


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