Gold at Crossroads and the Nexus Between Crude Oil and Vegetable Oils

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Investors Conflicted Over Gold’s Direction

• Data indicates two opposing investor sentiments in gold.
• Potential for inflation to head higher could be supportive.
• Rising inflation expectations reflect economic optimism.
• Gold faces headwinds via rising competition from bitcoin.

Crude Oil Takes the Cue From Vegetable Oils

• For 16 years, soybean oil has led crude oil through price peaks and troughs.
• Vegetable oil’s link to crude oil market could be through biofuels.
• How will current strong rally in soybean oil market impact crude oil?
• South American drought, concerns over US crop weather supporting soybean oil.