Profit-taking is more important than CPI data
Oil prices are slightly lower in the first week. Last week saw them bounce back strongly on optimism around China’s economic recovery, post Covid transition. We are perhaps seeing some profit-taking now ahead of tomorrow’s inflation report which could have a big impact on sentiment one way or another.
Another positive inflation report could see oil surpass the December highs at $82 in WTI (and $89 in Brent) They haven’t been able to break that barrier yet despite the optimism around China but the prospect of a lower US terminal rate and soft landing could be enough to break through.
Monday’s gold price drop was more than half a percentage and it hit its lowest point since January. It appears that the correction is continuing. $1,820-$1,830 will be the next support level, followed by $1.780-$1,800, which looks even more intriguing. Ultimately, whether it remains in a corrective phase probably depends on tomorrow’s inflation data and it could take something much lower for it to bounce back, following the January jobs report.
For a look at all of today’s economic events, check out our economic calendar: