Oil Prices Stall, Gold Dips

Oil’s short-term momentum stalls

In line with price action elsewhere, profit-taking seemed to be the order of the day in energy markets. Both Brent crude and WTI beat a gentle retreat as short-term momentum stalled. Brent crude edged 0.60% lower to USD43.40 a barrel, and WTI fell a modest 0.70% to USD40.70 a barrel. Both contracts are unchanged in Asia in a moribund session.

Although oil prices have stalled, the buffet is gentle and not a prelude to an incipient spin lower. Both contracts are comfortably ranging at the upper end of their recent price levels. Brent crude has critical resistance at USD44.00 a barrel, and USD42.00 a barrel for WTI.

Markets have assimilated the impending increase in OPEC+ production without incident. As long as the price action across financial markets remains corrective, and not structural, oil’s consolidation should continue.

 

Profit-taking pushes gold lower

Gold fell 0.70% to USD1497.00 an ounce overnight, as investors looked at the price action elsewhere and decided to book profits ahead of the weekend. In line with the flat-line volatility elsewhere in Asia’s session, gold is almost unchanged at USD1498.00 an ounce this morning.

Support in gold remains between USD1480.00 and USD1490.00 an ounce, and as long as this region holds, gold’s price action at these levels remains consolidative, if somewhat directionless. A move through USD1680.00 an ounce implies a deeper correction, possibly as far as USD1750.00 an ounce.

Resistance at USD1819.00 an ounce remains the main barrier to further gold gains. It is unlikely to be tested in the upcoming New York session though, with price action implying another range-trading day is ahead.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst - Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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