Oil edges lower, gold stable

Oil pares gains as China continues reopening

Oil prices are slipping a little on Monday after stalling just above USD 120 a barrel. Clearly, traders were not overly impressed by the OPEC+ output hike last week once the details of the deal were released. Allowing countries, the bulk of which are running at capacity, to increase output faster will only increase the shortfall, rather than solve the issue of tightness in the market. But then, was it ever intended to do anything more? Or just a symbolic gesture.

The ongoing reopening in China will continue to support demand and be a bullish factor for crude prices. Of course, the flip side of that is such commitment to Covid-zero means restrictions could be reimposed at any time.

Gold treading water

Gold is trading a little lower today but broadly speaking is continuing to tread water around USD 1,850. There hasn’t really been much movement on that front over the last couple of weeks, despite there still being decent intraday volatility. Higher yields pose a risk to the gold recovery trade and a higher inflation reading on Friday could mark the end of it.

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