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Oil pares losses, gold eyes nonfarm payrolls

Oil pares losses, gold eyes nonfarm payrolls


Oil tests lows as traders not deterred by Saudi warnings

Oil prices have rebounded off their lows today, having at one stage come very close to the bottom seen in March and May. It’s a very interesting development coming just before OPEC+ meets this weekend and following warnings from the Saudi energy minister to “watch out”.

Of course, oil traders can argue that the Chinese economic rebound has stalled, manufacturing activity around the world is struggling, Germany is in recession and the US may be headed for one. The questions now are will OPEC+ see it that way and could Russia be convinced to cut again? If not, Brent crude may well test those recent lows more forcefully.

Yields edge lower, lifting gold ahead of the jobs report

Yields have eased in recent days which has enabled gold to claw back some of the losses it incurred over the last month on the back of repeated disappointment with the economic data. That isn’t to say the correction is over in the yellow metal but a weak jobs report tomorrow could help it gain some traction.

Weak labour market figures have proven a lot to ask until now and today’s ADP release may suggest we’re in for disappointment once more. Its track record is poor but traders may be feeling a little less confident now. Should we get some rare positive data, $2,000 could represent a significant psychological hurdle to the upside.

For a look at all of today’s economic events, check out our economic calendar:

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