After a surprise stronger U.S. Inflation reading for August bolstered predictions for more astronomical Federal Reserve rate rises, oil investors languished in yet another; which served as the final trading day for the q3 of 2022.
The price of gold, rose for the fourth straight day, reaching a one-week high following a mainly terrible September for longs in the market. Despite significant losses for September and the third quarter, which is the first quarter in which oil has seen a loss in two years, U.S. Crudes had a robust run-up; which kept the market in good stead for a tiny weekly gain in five.
The impact on oil and other risk assets was a result of data showing that the Personal Consumption Expenditures (PCE) Index; the Fed’s favored inflation gauge, increased 6. 2% in the year to August as opposed to 6.3% in the year to July.
The Federal Reserve increased interest rates this year by 300 points to combat inflation, up from a base of just 25 points in February.
Russia is another factor affecting oil prices. According to sources cited by Investing.com, Russia is pressuring OPEC+ to reduce output by a significant 1.0 million barrels per day or close to that amount. Gold is frequently used as a store of wealth, a protection against inflation, and a hedge against rising Fed rates.