Crude prices got an unexpected boost from a US economy that doesn’t want to break. Another round of US data supported the argument that this economy still could get a soft landing, which is very positive for the short-term crude demand outlook. The problem with the long-term growth outlook for the US economy is that it needs a recession in order for inflation to get tamed. Strong data is not necessarily good news for winning the war against inflation and that will weigh on long-term US growth prospects.
Improving news with China’s COVID situation and a resilient US economy should keep oil prices supported above the $80 region.
Gold is softening a bit as better-than-expected US GDP data supports the argument that the Fed could still deliver a soft landing. Gold’s rally was on hold until the FOMC decision, so this morning’s weakness to strong GDP and jobless claims data was an easy trade. Safe-haven demand is still needed as the consumer is clearly weakening here and we will probably need to wait a little longer for GDP and claims data to catch up.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
- SEO Powered Content & PR Distribution. Get Amplified Today.
- Platoblockchain. Web3 Metaverse Intelligence. Knowledge Amplified. Access Here.
- Source: https://www.marketpulse.com/20230126/oil-gets-a-gdp-boost-gold-drops-ahead-of-fed/