The oil price snapback will only continue if the headlines continue to support the narrative that several countries are starting to have a much better handle on the Delta variant. The oil market is still very tight and with Chinese demand picking up, crude prices only have one way to go after an overdone selloff.
Crude prices should benefit from declining inventories and as the world’s two largest economies start to see a return of normal crude demand.
Gold prices continue to go nowhere as investors eagerly await Fed Chair Powell’s next chess move over how to delicately signal readiness over tapering asset purchases. Gold prices gave up early gains at the NY open as stocks pushed to fresh record highs and after battered Chinese stocks rebounded.
Stocks pared gains and gold prices steadied after President Joseph Biden stuck with the Aug. 21 date for withdrawal from Afghanistan. Earlier, a Taliban spokesman said the US must complete Afghanistan evacuations by Aug. 31.
Heading into Jackson Hole, gold prices seem fairly supported because not many traders think Fed Chair Powell has seen enough progress in the labor market and easing of Delta variant concerns to formally signal tapering in September.
Gold will still be able to thrive over the next few months if the Treasury yield curve slowly steepens. Gold may form a broadening formation between the USD 1780 and USD 1820 levels leading up to Fed Chair Powell’s speech on Friday.
Oil Rush, Gold Steady
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