Oil has climbed above $113, hitting a six-month high. Gold and crude oil, two traditional safe-haven assets, are telling completely opposite stories.
At the close on October 30, Brent crude stood at $113.4 a barrel and West Texas Intermediate at $104.1. Both posted their highest settlement prices since late April, rising more than 2% on the day. For October as a whole, Brent gained 13.6% and WTI rose 15.2%—their biggest monthly gains in six months and a third consecutive week of advances. But modest pullbacks had already emerged in Sunday’s after-hours trading (over-the-counter weekend trading): Brent fell below $113 and then $112, while WTI dropped below $103, down more than 1% intraday.
On the same day, spot gold plunged 3.61%, falling below $3,900. The opposing moves in these safe-haven assets stem from completely different drivers. Gold is sensitive to interest rates: U.S. GDP grew at an annualized rate of 3.4% in the third quarter, and the Personal Consumption Expenditures price index rose 3.6% year over year in September. Markets still assign odds of more than 70% to a 25-basis-point rate hike in December, and non-yielding gold is being weighed down by rate expectations. Crude oil, by contrast, is sensitive to supply disruptions. The market is concerned that the conflict between the U.S. and Iran could escalate after the November 3 U.S. midterm elections. Fighting in Yemen and an attack on a Saudi Arabian refinery have followed in quick succession. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have reached an agreement in principle to keep December production targets unchanged, leaving no additional supply to offset the risk premium—the extra amount the market pays for uncertainty. Saxo Bank’s October 29 assessment is worth noting: even if the conflict ends, oil prices could settle into a new $70–$90 range, rather than returning to the pre-conflict level of $60–$70, because global restocking demand remains in place.
Looking ahead, oil faces a real test next week: the November 3 midterm election results, the November 6 nonfarm payrolls report, and the November 10 Consumer Price Index. Any of these coming in above expectations could prompt markets to reprice inflation and interest rates. One risk is worth spelling out: an excessive rise in oil prices could backfire on stocks. Higher energy costs fuel inflation, inflation lifts rate-hike expectations, and those expectations weigh on valuations. On October 30, when the Nasdaq Composite plunged 2.86%, oil and gold had already demonstrated this seesaw effect. Conversely, if geopolitical tensions ease, the risk premium above $100 could evaporate quickly. Anyone chasing crude or energy stocks should have an exit plan.
Gold is falling because money has become more expensive; crude is rising because oil may be in short supply. One world, two pricing dynamics—and next week’s election and economic data will put one of them to the test first.
A reminder: The U.S. switches to standard time on November 1. From November 2, U.S. markets will open an hour later, at 10:30 p.m. Beijing time.
Market analysis is for reference only and does not constitute investment advice.
#原油 #U.S.Stocks
At the close on October 30, Brent crude stood at $113.4 a barrel and West Texas Intermediate at $104.1. Both posted their highest settlement prices since late April, rising more than 2% on the day. For October as a whole, Brent gained 13.6% and WTI rose 15.2%—their biggest monthly gains in six months and a third consecutive week of advances. But modest pullbacks had already emerged in Sunday’s after-hours trading (over-the-counter weekend trading): Brent fell below $113 and then $112, while WTI dropped below $103, down more than 1% intraday.
On the same day, spot gold plunged 3.61%, falling below $3,900. The opposing moves in these safe-haven assets stem from completely different drivers. Gold is sensitive to interest rates: U.S. GDP grew at an annualized rate of 3.4% in the third quarter, and the Personal Consumption Expenditures price index rose 3.6% year over year in September. Markets still assign odds of more than 70% to a 25-basis-point rate hike in December, and non-yielding gold is being weighed down by rate expectations. Crude oil, by contrast, is sensitive to supply disruptions. The market is concerned that the conflict between the U.S. and Iran could escalate after the November 3 U.S. midterm elections. Fighting in Yemen and an attack on a Saudi Arabian refinery have followed in quick succession. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have reached an agreement in principle to keep December production targets unchanged, leaving no additional supply to offset the risk premium—the extra amount the market pays for uncertainty. Saxo Bank’s October 29 assessment is worth noting: even if the conflict ends, oil prices could settle into a new $70–$90 range, rather than returning to the pre-conflict level of $60–$70, because global restocking demand remains in place.
Looking ahead, oil faces a real test next week: the November 3 midterm election results, the November 6 nonfarm payrolls report, and the November 10 Consumer Price Index. Any of these coming in above expectations could prompt markets to reprice inflation and interest rates. One risk is worth spelling out: an excessive rise in oil prices could backfire on stocks. Higher energy costs fuel inflation, inflation lifts rate-hike expectations, and those expectations weigh on valuations. On October 30, when the Nasdaq Composite plunged 2.86%, oil and gold had already demonstrated this seesaw effect. Conversely, if geopolitical tensions ease, the risk premium above $100 could evaporate quickly. Anyone chasing crude or energy stocks should have an exit plan.
Gold is falling because money has become more expensive; crude is rising because oil may be in short supply. One world, two pricing dynamics—and next week’s election and economic data will put one of them to the test first.
A reminder: The U.S. switches to standard time on November 1. From November 2, U.S. markets will open an hour later, at 10:30 p.m. Beijing time.
Market analysis is for reference only and does not constitute investment advice.
#原油 #U.S.Stocks