Oil Prices Steady Ahead of Fed Decision Amid Demand Concerns

Oil prices stabilized as concerns over deteriorating demand forecasts overshadowed the anticipated interest rate cut by the Federal Reserve.

Content

Oil

Gold

The Fed

Oil

Brent crude traded near $73 per barrel after rising 1.6% on Monday, while West Texas Intermediate (WTI) surpassed $70. Opinions remain divided on the monetary easing path the Federal Reserve will take, with some betting on a half-percentage-point cut expected on Wednesday. Lower interest rates are likely to boost energy demand. Oil has lost about 14% this quarter due to concerns over an economic slowdown in China, the largest crude importer, and signs of ample supply. According to EA Quant Analytics, short positions are nearing their maximum limit, which may ease recent selling pressures.

Gold

Goldman Sachs: Gold could dip if rates are cut by a quarter percentage point.
Goldman Sachs believes gold may see a slight dip in the short term if the Federal Reserve opts for a 25-basis-point interest rate cut this week. However, the yellow metal could later rise to record levels, supported by increased flows into gold-backed exchange-traded funds (ETFs), according to their forecast. Analysts Lina Thomas and Dan Struiven noted in a memo that “the Fed’s rate cut is expected to trigger a resurgence of Western investment flows into gold ETFs, a factor that was largely absent during gold’s major rally over the past two years.” The memo added that the bank still holds its projection of gold reaching $2,700 per ounce by the beginning of next year.

The Fed

Fed decision bets push Wall Street traders toward small-cap stocks.
Wall Street traders, preparing for the Federal Reserve’s decision this week, continued to move away from investing in large tech companies that have driven the bull market since the beginning of the year.
With growing bets that the Fed will cut rates by half a percentage point on Wednesday, funds continued to flow toward economically sensitive sectors, away from major tech stocks, which are seen as safe havens. Apple shares dropped 3% after a leading analyst warned that demand for the iPhone 16 Pro was lower than expected. While the S&P 500 index showed little change on Monday, most listed stocks rose. This disparity was largely due to the weakness of major tech companies that dominate the primary U.S. stock index.

Oil Prices Steady Ahead of Fed Decision Amid Demand Concerns

Oil Prices Steady Ahead of Fed Decision Amid Demand Concerns

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