Oil heads for worst week since April as gold nears best week since August

what happened

According to TradingView, oil was on course for its largest weekly loss since April on Friday. Traders weighed the chances of bringing an end to the months-long conflict in the Middle East after a choppy stretch. West Texas Intermediate climbed back toward $91 a barrel, recovering from a sharp sell-off that followed the Democratic victory in the US midterm elections, yet the commodity is still down more than 12% this week.

Gold was heading for its strongest week since August. After the midterms, the dollar and Treasury yields fell, making the metal more appealing. Bullion hovered near $4,090 an ounce, set for a gain above 5% on the week. Silver rose 0.4% to $51.99, while platinum and palladium slipped. The dollar was little changed against major currencies, as a sharp drop in US equities pushed investors toward safe havens such as the yen and yields eased ahead of a key payrolls report.

why it matters

Oil's drop reflects a shrinking risk premium if peace prospects improve, while gold benefits from the weaker dollar and lower yields. The upcoming US payrolls report is the next key event for these markets.

market impact

Oil: peace hopes cut the risk premium, pressuring WTI; gold: weaker dollar and lower yields support prices

• ▼WTI pressure down — hopes for ending the war reduce the geopolitical risk premium
• ▲Gold pressure up — a weaker dollar and lower Treasury yields make the metal more attractive
• ▼US dollar pressure down — weakness after the midterms and a shift to haven assets weigh on the currency

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