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COMMODITIES: Risk Off Sentiment Prompts Sharp Pullback for Gold, Oil Spikes

COMMODITIES
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  • General risk off sentiment on Thursday, emphasised by the sharp weakness for major equity benchmarks, has prompted a solid pullback for gold. The spot price has declined 1.5%, unwinding an overbought condition for the yellow metal.
  • Overall, the trend condition in Gold is unchanged and bulls remain in the driver’s seat. The latest climb has resulted in a breach of $2685.6, the Sep 26 high, confirming a resumption of the primary uptrend and maintaining the price sequence of higher highs and higher lows.
  • For oil prices, WTI had been heading into the close holding most of its gains on the day, building on the upward momentum following talks of an OPEC+ cut unwinding delay and a drop in U.S. crude inventories. A Reuters sources led story on Wednesday said that OPEC+ was considering delaying returning voluntary cuts back to the market by a month or more referring to the planned December unwinding.
  • However, late headlines from Axios reporting that Iran is preparing for a major retaliatory strike on Israel “within days” via a strike from Iraq, citing Israeli intel sources, drove a geopolitical risk premium back into oil on Thursday. WTI futures are currently up 2.75% as we approach the APAC crossover.
  • For Natural gas, Henry Hub extended losses today after an above-average weekly injection into US natural gas storage, according to the latest weekly EIA data.
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  • General risk off sentiment on Thursday, emphasised by the sharp weakness for major equity benchmarks, has prompted a solid pullback for gold. The spot price has declined 1.5%, unwinding an overbought condition for the yellow metal.
  • Overall, the trend condition in Gold is unchanged and bulls remain in the driver’s seat. The latest climb has resulted in a breach of $2685.6, the Sep 26 high, confirming a resumption of the primary uptrend and maintaining the price sequence of higher highs and higher lows.
  • For oil prices, WTI had been heading into the close holding most of its gains on the day, building on the upward momentum following talks of an OPEC+ cut unwinding delay and a drop in U.S. crude inventories. A Reuters sources led story on Wednesday said that OPEC+ was considering delaying returning voluntary cuts back to the market by a month or more referring to the planned December unwinding.
  • However, late headlines from Axios reporting that Iran is preparing for a major retaliatory strike on Israel “within days” via a strike from Iraq, citing Israeli intel sources, drove a geopolitical risk premium back into oil on Thursday. WTI futures are currently up 2.75% as we approach the APAC crossover.
  • For Natural gas, Henry Hub extended losses today after an above-average weekly injection into US natural gas storage, according to the latest weekly EIA data.