Oil and Gold Under Pressure

Oil testing two month support

Oil is hovering around technical support, having pushed against these levels on the opening day of the week.

Brent crude dipped briefly below $42 and WTI $39 but both having recovered a little to sit just above thse levels. The declines today took both to more than two month lows and despite climbing back above support levels, both continue to look very vulnerable to a more significant correction in the coming weeks.

Gold looking shaky

The dollar is making small gains on Monday and could be showing signs of heading for a corrective move, having come under heavy selling pressure the last few months.

The greenback sell-off has lost momentum and a small recovery could be next, which does not bode well for gold as it tries to rediscover its mojo. The longer-term outlook looks good for gold, even now as it trades above $1,900 but the short-term may look a little less bright.

Should the dollar break higher, $1,900 will look in serious jeapardy, with $1,860 below not looking much better. Let’s face it, the yellow metal could move back to $1,800 and would still look good, even more attractive arguably.

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.

Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam