Oil rallies, gold turns positive

Oil

Oil prices are rallying as the crude fundamentals continue to turn bullish, while uncertainty persists with how OPEC+ will handle Russia’s output quota and if the group will be able to deliver more output in the coming months. Economic data from the US shows the economy is holding up, which supports the idea that crude demand should improve and that this will be a strong driving season.

OPEC+ needs to figure out how they will handle Russia’s crude output quota, but regardless the group as a whole has limited spare capacity.  This oil market will remain tight until demand destruction becomes an issue, but right now that doesn’t seem like that will happen anytime soon.

Gold rises on market jitters

Gold is getting its groove back on safe-haven flows as investor worries return that the Fed may not be easing up its rate-hiking campaign anytime soon. Wage pressures in the US are not easing and that should keep inflationary pressures going for a few more months.

The war in Ukraine could see an escalation after the US has signaled they will give Ukraine advanced rocket systems.  Gold could thrive as safe-haven flows will only grow as geopolitical risks remain elevated and over fears of aggressive global central bank tightening.