Gold rises post ECB’s Klot comment and Canadian CPI report

  • ECB’s Knot (hawk) noted that for July I think it is a necessity, for anything beyond July it would at most be a possibility but by no means a certainty
  • Canadian headline CPI was 2.8%, versus 3% expected, which should allow the BOC to keep rates on hold
  • Global crypto market cap hovers around $1.2 trillion

Oil

Crude prices are steadying here on expectations that the oil market will remain tight as Russian shipments drop and as China prepares to provide more support to households. With Russian flows falling to a six-month low, expectations are growing that OPEC+ will keep this market tight throughout the summer. ​ China Commerce Ministry (MOFCOM) is pressuring financial companies to improve support on household spending. ​ Further speculation of a Q3 RRR cut from China should also keep the oil market supported as that should imply China’s economy will only get better, which should be good news for the crude demand outlook going forward. ​

Brent crude looks like it wants to find a home above the $80 level and that shouldn’t be too hard as long as the crude demand outlook doesn’t get blindsided. ​

Gold

Gold traders have their rally caps on after ECB’s Knot signaled they could be ready to pause in September and after Canadian inflation dropped to the BOC’s control range for the first time since March 2021. ​ Global bond yields are falling and that is good news for bullion investors. ​

So far this earnings season, the big banks have outlined a vision that includes slowing growth in the US, which should allow the Fed to be one and done with rate hikes. ​ Unless core inflation proves to be a lot stickier than Wall Street fears, the peak in global rates should be in place by the fall. ​ Gold might struggle to make a run at the $2000 level, but that could change if bond yields continue to come down and the Fed signals they are likely done hiking next week after delivering one last quarter-point rate rise. ​ ​ ​ ​

Bitcoin

Bitcoin continues to waver, tentatively falling below the $30,000 level, which is just the June low. ​ As the cryptoverse awaits a pivotal Bitcoin ETF update, flows remain dormant. ​ The institutional money is not buying right now and retail is struggling with the current macro backdrop. ​ Bitcoin seems poised to be stuck in a range, which could warrant a slightly further dip towards the $29,500 level. ​

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

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. Prior to OANDA 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, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.

Ed Moya

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