Gold edges higher as dollar rally halts
Non-interest-bearing gold got crushed early as more global central bank rate hikes are getting priced in. Gold is edging higher as the dollar rally halted as the euro rises on expectations the ECB will deliver more rate hikes than investors initially thought. If the dollar does not rally here, that could provide some relief for gold. If equities remain in risk aversion mode as the speculative money that bought risky assets this month grows nervous that economic growth is about to collapse, gold might be able to stabilize here.
Gold was vulnerable to a plunge towards $1700 but it is starting to show some resilience. With the UK on holiday, today’s moves might be meaningless. The true test for gold will come tomorrow.
Oil
The one trade that everyone can agree upon is that the oil market will likely remain tight. Oil rallied on rising risks of a potential civil war that could put Libyan output at risk and over growing expectations that OPEC+ is positioning themselves to cut production. What is also helping oil today is that despite risk aversion running wild, the dollar rally is on hold.
Oil has been trending lower but the supply side risks are too great and prices need to find a home above the $100 a barrel level.
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Source #RobotFX Team
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