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The US Energy Information Administration has raised its forecasts for 2023 and 2024. It expects Brent to average $85.01/barrel in 2023 and $81.21/barrel for 2025. These are increases in forecast of 2.5% and 5% respectively. Expectation for West Texas Intermediate are similar.
Gold has breached the psychological $2,000 level and has an underlying positive momentum. The precious metal was up over 7% in March with its all-time high of 2,074 now in sight. It’s appreciated over 25% since its November 2021 low.
The commodity stays on the front foot after Monday’s jump, which was sparked by the surprise oil production cuts announced on Sunday by a series of OPEC+ countries
Oil jumped after Saudi Arabia and other oil producing countries, in a surprise move, announced production cuts in excess of one million barrels/day
The pair slides after factory activity in China eased and heads towards the conclusion of a mixed month, awaiting today’s UC PCE inflation update
The commodity runs its second positive week, rebounding from its recent plunge as sentiment improves, but markets now brace for Friday’s US PCE inflation update
The commodity made a strong start of the week, as fears over the health of the financial system ebbed, but faces pressure today, as markets brace for the Fed’s policy decision
Gold’s daily candlesticks are trading in their bullish channel between the upper blue and red bands. The red Bollinger bands have expanded due to an increase in volatility. The longer the precious metal remains in this channel, the greater the likelihood of further price appreciation.
Gold is generally inversely correlated to the US 10-year real rate. There may be short periods when they sync up positively, but these are rare. The current correlation coefficient is -59%.
USOil’s daily chart is trading in its bearish channel between the lower blue and red bands. The red Bollinger bands are moving in opposite directions as volatility has increased. The longer it maintains this channel the more pressure will be applied to the USOil price.
The last three trading sessions has seen the US 02-year decline from 5.076% to 4.055%. Today’s trading is especially frenetic after weekended endeavours by regulators to stave off a bank run and prevent contagion from the SVB failure. Over the same period money has rotated into gold as a safe haven.
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