Crude prices are rallying as China’s borders open, refiners get big quotas, and as the dollar slides. ​ Chinese hopes for an improving reopening from Covid could help propel oil prices much higher. ​ Oil’s downward trend was approaching critical support, so energy traders were eagerly looking for any reason to jump back into the oil trade.

The macro environment seems like it is improving and that should help keep oil’s rally going. If the soft landing actually happens, oil might trade closer to the $90 a barrel level this summer.

Gold

It looks like everyone is liking gold as the peak in yields appears to be in place. Gold could see further momentum if China’s optimism continues. ​ Ahead of the Lunar New holiday, retail gold buying should improve even as prices are elevated. ​ ​

Gold’s rally however should run out of steam as traders will await to see how the Fed reacts to the December inflation report. ​ Expectations are for the disinflation trends to continue, but core cpi might struggle to come down as quickly. ​ Energy prices plunged in December, but that positive contribution to the fight against inflation might go away this month.

Gold has massive resistance at the $1900 level, but that might not last if core prices cool much more quickly.

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.

Ed Moya

Senior Market Analyst, The Americas at OANDA

With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.

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• Source: https://www.marketpulse.com/20230109/oil-rallies-on-china-optimism-gold-higher/