Oil lower on AZN news, gold steady

Gold steady ahead of FOMC minutes

Gold prices are little changed ahead of the release of the FOMC minutes that could provide further reiterations that policy is on hold for the foreseeable future and that they are not ready to discuss reducing asset purchases.   Gold pared earlier losses after the Hungarian central bank tripled their gold holdings in March.  The Fed might think inflation will be transitory, but many emerging market central banks are fearful of runaway inflation and that could trigger steady central bank bullion purchases going forward.

Gold is waiting to see if the Fed minutes triggers a catalyst for the bond market rout to resume.  If Treasury yields remain capped, gold could continue appreciating.

Oil

Crude prices remained heavy despite a larger-than-expected draw as demand outlook took a small hit after the AstraZeneca COVID vaccine was halted in the UK for people under 30 years old.  Europe’s COVID vaccine rollout has been very disappointing and today’s announcement that the UK will offer alternatives to people under 30 could lead to further vaccine hesitancy.

The EIA crude oil inventory report was mixed and hardly provided any reason to become more optimistic with the short-term outlook.  The headline crude inventory draw of 3.5 million bpd was larger than the 1.6 million forecasted drop, and the prior drop of 876,000 bpd.   Jet fuel demand is still weak, but that will change quickly as Americans get the travel bug once they are fully vaccinated.  Gasoline demand was steady but considering Spring Break finished, that is probably somewhat a bullish indication.

US crude production fell 200,000 barrels to 10.9 million bpd, a welcome sign for OPEC+ members who are concerned about conceding market share to the Americans.

WTI crude seems poised to consolidate a while longer between the USD57 and USD62.50 range.

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

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.

Ed Moya

Ed Moya

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