forexOil closing in on USD 100, gold dips

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Oil closing in on USD 100, gold dips

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Oil eyeing USD 100 after e escalation

While stock markets are enjoying a partial recovery, oil and gas prices remain elevated as a conflict in e significantly increases the risk of disruptions to n supply. While there is reportedly no desire to intentionally restrict supplies in the face of further escalation, assurances will be taken with a pinch of salt given recent developments.

The market remains extremely tight for oil and gas and the risk of disruption will result in a significant risk premium for as long as the possibility of conflict remains. A nuclear deal between the US and Iran will alleviate some of the pressures in the oil market but as we’re seeing, that’s doing little to stop oil prices marching towards USD 100.

Gold pares gains but remains well supported

Gold is now trading a little lower on the day after trading as high as USD 1,913 earlier in the session as risk appetite has gradually improved. The recovery looks fragile at best and barring a significant positive development, it’s hard to imagine gold not seeing plenty of support on the dips.

For so long, people have questioned gold’s position as a safe haven and an inflation hedge but recent events have put that debate to bed. The yellow metal continues to trade around USD 1,900 and could go much further in the event of major escalation.

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