Gold Buys Fear, Energy Sells the War Premium Again
Today’s screen looked contradictory. Middle East risk returned, and gold reacted first, with August futures up $49.20 to $4,131.60/oz. Energy went the other way across the board. Brent Aug fell $2.03 to $75.99, WTI Aug fell $1.93 to $71.59, RBOB Aug lost 8.39 cents to $3.0195/gal and heating oil Aug lost 11.43 cents to $3.5432/gal. July ICE gasoil expiry tomorrow in NWE aggravated the front-end move, with July gasoil down $64.50 to $1,034.25/mt, Jul/Aug backwardation down roughly 22% to +$18.75/mt and Jul/Dec down to +$159.50/mt. Yet expiry is only part of the story. The broader energy complex sold off at the same time gold rallied. That means the market is pricing fear in precious metals, while stripping war premium from oil and products.
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