Oil price correction continues, gold bounces back

Is oil looking to close the gap?

We’re continuing to see a correction in oil prices following a more than 2% decline on Wednesday. That saw the price move below the post-OPEC+ cut lows from a couple of weeks ago and move into the void left by that surprise announcement.

Now it’s a question of whether that gap will be filled, with the high from the Friday before falling just shy of $76 in WTI and $78 in Brent. That would require another drop of around 3% but only take the price back to the middle of the range oil was trading in for months prior to the SVB collapse.

Gold rebounds but may need Fed boost

Gold prices rebounded on Wednesday after falling back toward $1,970, a little above the $1,940-$1,960 region that stood out as a big support region. We could still see further pressure to the downside for gold prices if yields continue creeping higher but that has stalled a little following a decent rebound in recent days.

It still feels like markets are finding their feet in the aftermath of the mini-banking crisis last month and I don’t think we’re even nearly there yet. The full ramifications on credit markets and the economy will soon become clear, after which we could see a significant adjustment in interest rate expectations, bond markets, and therefore gold. If that adjustment is much lower for rates, record highs may not be that far away.

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