Commodities across the board got crushed after a very hot inflation report sent the dollar higher as expectations were boosted for a much more aggressive Fed. Inflation is proving to be much more troubling and that is raising the risk of the Fed sending the US economy into a recession. Energy traders are looking at a tight oil market that is going to have a rough short-term outlook as the consumer is going to be a lot weaker given the robust rate of inflation with core prices.
China’s zero-COVID policy remains intact and that will keep any rebounds that emerge over the coming weeks capped. The US is the big wildcard and if that demand outlook weakens, oil could resume its downward trajectory that has been in place since the start of the summer. A big question mark for oil markets is will the US continue to tap the SPR beyond October. Even with OPEC+ reducing output going forward the energy traders might be less confident the oil market will remain tight much longer.
Gold under pressure
Gold got crushed after a scorching inflation report completely reset investor expectations on when the Fed will wrap up their tightening cycle. Wall Street is convinced that the Fed will deliver a 75bp rate hike later in the month and probably will start to price another massive hike in November, which means the downward shift to a half-point hike might have to wait till the December meeting. The playbook for a lot of traders was that the Fed would be done with raising rates in December but that probably won’t be how things play out as inflation remains hot.
Gold is in the danger zone again and could see another run towards the summer lows. We are nowhere near pricing in peak Fed tightening and that means this could be a rough patch for gold. If gold breaks below $1700, not much support is there until the $1650 region.
Turn Off CNBC and Watch Real Yields
Investors watch CNBC and CNBC’s competitors for guidance on where the markets are going. CNBC may provide insightful commentary from very qualified investors….
Midweek data: balance of trade around the world ahead of the NFP
The magnitude of the current bounce suggests considerable institutional involvement, which is practically unknown in the week before a major event such…
Sunstock Inc (OTCMKTS: SSOK) Major Run Northbound as Revenues and Profits Grow Quickly
Sunstock Inc (OTCMKTS: SSOK) is a low float runner that has emerged as one of the biggest runners in penny stocks as of late skyrocketing from $0.07 back…
Crashing Pound Prompts Gold Demand Surge, Exhausts Bullion Dealers
The FatFIRE Movement: 7 Ways to Retire Young and Rich
Western Exploration Looks To Expand Resources at Nevada Project
Turn Off CNBC and Watch Real Yields
Gatos Silver Inc. (GATO) can’t be written off after posting last 3-months Average volume of 428.52K
Here is why Wheaton Precious Metals Corp. (WPM) stock volatility recorded over the last month was 3.57%
Eldorado Gold reports drilling progress at three projects, shares up
An Analysis Of Silvercorp Metals Inc. (AMEX: SVM), And Its Business Forecast
Gold Fields, Yamana set down dates for voting on proposed all-share takeover
Stocks, Bonds, Bitcoin, & Bullion Jump As Dollar Dumps
Companies20 hours ago
Uranium Energy $UEC Discovers High-Grade #uranium at Christie Lake
Companies21 hours ago
The case for low-grade sulfide nickel deposits
Financing News23 hours ago
Lion One Drills Exceptional High-Grade Intersections as Part of Metallurgical Drill Program
Financing News24 hours ago
TASEKO MINES PROVIDES FLORENCE COPPER PERMITTING UPDATE
Uncategorized17 hours ago
High Voltage: China may dominate 90% of the world’s cathode production by 2030, but the devil’s in the detail
Uncategorized21 hours ago
Goldshore hits bigly copper
Energy & Critical Metals23 hours ago
Rare Earths MMI: A Renewed Push for Rare Earth Independence
Uncategorized23 hours ago
Aussie Lithium Exports to Jump More Than Ten-Fold in Two Years