Oil slips, gold eyes inflation data

Oil slides amid Chinese Covid restrictions

Oil prices fell again on Wednesday, taking losses over the last couple of days to more than 5%. Brent and WTI are basically flat on the day at the time of writing, settling towards the lower end of their recent trading ranges.

While the narrative in recent weeks has focused on the potential for Chinese Covid restrictions to be relaxed, which has driven Chinese equities higher and lifted oil prices, the reality has seen case numbers soaring, restrictions reimposed and mass testing undertaken. This doesn’t exactly add substance to the rumours and we may be seeing some unwinding of those positions.

Gold steadies ahead of CPI data

Gold has steadied over the last 24 hours or so after surging late last week and early this in the hope that inflation data delivers what the Fed, and investors, crave so much. It’s a very hopeful-looking move and one that could end badly if the CPI data continues this year’s trend of disappointing to the upside. I just wonder at this point what investors need to see because the recovery of the last week has been strong – more than 5% – which suggests expectations are quite high. Time will tell if hopeful traders will be burned once more.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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