Oil pares gains, gold passes USD 2000

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Oil pares gains, gold passes USD 2000

Oil prices remain high but give back huge early gains

Oil prices were up more than 17% at one stage after the open but that has been pared right back as the day has progressed, with Brent now up 1.5% around USD 120 a barrel. In a sign of how ridiculous the situation is right now, that’s coming as quite a relief compared to how bad it was looking at one stage.

The market has shown its vulnerable side now though and it’s quite concerning. On the one hand, without German support, an EU ban on n oil imports looks highly unlikely and the pivot away will take years. But then there’s a lot that’s happened in the last couple of weeks that looked highly unlikely a month ago and the situation continues to evolve rapidly.

The risks remain firmly tilted to the upside as far as oil prices are concerned. Downside risks primarily focus around e and  finding common ground and based on the current demands, that does not look likely any time soon. Even a nuclear deal would only provide partial relief compared to n supply disruptions and that isn’t even progressing as hoped.

Gold pares gains but record highs are in sight

Gold briefly surpassed USD 2,000 earlier in the day when equity markets were in the depths of despair at the thought of Europe banning n oil. Between the inflation and economic consequences of such a move, traders quickly flocked to a dear old friend in gold. As the morning has progressed and nerves have eased, so have gold prices, with the yellow metal now finding itself only marginally higher around USD 1,975.

The situation remains highly uncertain though and markets extremely volatile which should ensure gold remains a firm favourite. All-time highs are not that far away and in the current environment, there’s every chance that we see it surpassed at some point.

For a look at all of today's economic events, check out our economic calendar: www.marketpulse.com/economic-events/

Source: Oil pares gains, gold passes USD 2000