Oil Rises on Tensions, Gold Falls Under Fed Pressure
Oil prices have been rising due to escalating Middle East tensions, but traders are showing limited appetite to push prices significantly higher. Despite renewed conflict between the US and Iran, millions of barrels are still moving through the Strait of Hormuz.
The US is preparing additional sanctions on Iran, while Washington has moved to secure control of Venezuelan oil reserves to replenish its emergency stockpile. Disruptions to refining capacity across the Middle East and Russia have tightened diesel supplies, pushing fuel prices higher and driving expectations for wider diesel margins in the coming years.
From a technical perspective, crude oil remains in a cautiously bullish structure, with price holding above both the 50-day and 100-day SMAs. The Stochastic oscillator is recovering from lower levels and moving higher, suggesting improving short-term momentum. A decisive break above $85 could strengthen the bullish outlook.
Meanwhile, gold has fallen further after dropping more than 3% on Friday, pressured by a more hawkish Federal Reserve stance. Fed Chair Kevin Warsh reaffirmed the commitment to bringing inflation back to 2%, pushing markets to price in more than a 50% chance of a rate hike in September.