Oil, precious metals drifting in Asia trade

Oil markets had a quiet Friday session in directionless trade. Brent crude fell 0.25% to USD44.90 a barrel and WTI fell 0.30% to USD42.30 a barrel. A weaker US dollar this morning has supported oil, with both contracts edging 20 cents higher to USD45.10 and USD42.50 a barrel respectively.

WTI continues to flirt with its 200-day moving average (DMA) at these levels, but also now has firm resistance at USD43.00 a barrel just above. Support lies at USD41.00 a barrel. Brent crude has resistance at USD46.40 a barrel, followed by its 200-DMA at USD46.60 a barrel. Short-term support lies at USD44.30 a barrel.

Oil markets continue to be in a state of equilibrium at these levels. We note that speculative interest in the futures has also fallen, suggesting that short-term traders’ eyes are looking at opportunities elsewhere. The resurgence of Covid-19 around the world, notably Europe, appears to be crimping consumption expectations, meaning that oil has not caught the full tailwind of a falling US dollar. We are likely to experience range-trading for some time to come.

Both gold and silver continue to lick their wounds

The frenzied volatility of last week on gold and silver has clearly inflicted a lot of pain on the FOMO crowd. Both metals eased into the week’s end, in consolidative price action as traders licked their wounds. Gold fell 0.45% to USD1944.50 an ounce, and silver fell 3.80% to USD26.4500 an ounce.

Today’s session in Asia has been quiet so far, with both metals almost unchanged at USD1942.00 and USD26.2950 an ounce, respectively. Asian traders are unlikely to rock the boat today, with financial markets, in general, drifting aimlessly. The present levels give no clue to the next direction for precious metals, and the wise would be best to wait on the side-lines for the gnomes of Wall Street to arrive at their desks.

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Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was 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 and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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