Despite aggressive risk aversion on Wall Street, sending the S&P 500 to its worst single-day performance in last 3 months, growth-linked crude oil rates were capable to get by relatively unscathed. Gold, on the other hand, did more critical off compared to WTI, but not quite to the same extent as equities. Copper futures meanwhile slipped 1.71%.
The flexibility in WTI might have been a result of the latest EIA crude inventory report. Stockpiles unexpectedly narrowed 9.9 million barrels last week, the most since July 2020. This decrease in supply helped offset some of the downward pressure energy rates were facing as a result of broad-based risk aversion. This was partially triggered by short squeezes in heavily-sold stocks such as GameStop and AMC.
Anti-fiat gold rates decreased as a strengthening haven-linked US Dollar capitalized on investors fleeing for safety in Treasuries. That in-turn started yields lower in government bonds, a dynamic that can at times bode well for XAU/USD. Thus, falling Treasury prices in some ways cooled downside potential for the gold.
Futures tracking Wall Street are in the red heading into the European and North American trading sessions. Here poses a risk for WTI rates as the impact of stockpile data wears off. Gold faces an interesting situation because if Treasury yields continue weakening, that may offset some of the downside pressure from a stronger Greenback. All eyes are on US fourth-quarter GDP data due over the remaining 24 hours.
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