Oil slips closer to USD 100
Oil prices are slightly lower again today and not far from double-digit territory as traders grapple with the prospect of recessions and a tightening of Chinese restrictions. The unwillingness and, more accurately, inability of OPEC+ to turn the taps on more is keeping oil prices very elevated but at a little over USD 100, it’s more comfortable than was looking probable at times over the last couple of months.
The EU struggling to find a coordinated response on Russian oil is possibly helping to alleviate some near-term pressures, although progress with Hungary is reportedly being made. This also comes as some OPEC members warn of dwindling energy capacity as a result of underinvestment, perhaps a sign that we should get used to these higher prices.
Gold struggling as central banks raise their game
Uncertainty and risk aversion in the markets is doing little to support gold at the moment, with the dollar instead being favoured and the yellow metal under heavy pressure. Since coming within a whisker of USD 2,000 a few weeks ago, gold has fallen more than 7% and looks vulnerable to further losses.
Inflation is still extremely high and economic uncertainty is weighing heavily on risk assets. But central banks are being very aggressive to try and contain price pressures which appears to be getting in the way of gold retaining the gains it made earlier in the year when they were still in denial.
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