Crude prices are steadily rising as the EU is making progress towards its Russia oil sanctions ban. The oil market will remain tight going forward now that OPEC+ is set on delivering meager output increases and as US production struggles despite rising rig counts. The biggest uncertainty for the crude demand outlook remains the outlook for the Chinese economy. China won’t be abandoning their zero-COVID policy anytime soon and that will keep the short-term crude demand outlook vulnerable. China’s COVID situation might not be improving anytime soon and now that the data is showing the impact of business restrictions is more widespread than just to Shanghai and Beijing.
Oil will remain a volatile trade going forward with most of the fundamentals still pointing to higher prices.
Just when gold seems to be showing signs it is getting its luster back, the bond market says ‘not so fast’. Gold continues to struggle in this current environment of surging global bond yields and that might last a little while longer as some central banks for the purpose of defeating inflation might be willing to send their respective economies into a recession.
Gold’s awful few weeks of trade has seen a collapse of the $1900 level and that should prove to be key resistance now. If the bond market selloff accelerates and the dollar surges, gold could be vulnerable to a drop towards $1835 and if that does not hold, $1800 might be targeted.
Confidence in crypto markets is waning after Bitcoin tumbled below the $37,000 level following the surge in global bond yields. If risk appetite does not return, Bitcoin could be vulnerable to a significant drop towards the $30,000 level. Choppy trading between $35,000 and $40,000 could be where Bitcoin settles if Wall Street does not price in much more tighter monetary policy by the Fed.