Correction well underway in oil
September is shaping up to be a corrective month. Tech stocks are sliding, the dollar is making a comeback and the oil rally has run out of fuel.
With $39 falling in WTI and $42 in Brent, the correction is on. There’s been a number of reported catalysts, the latest being Saudi Arabia selling at a discount but the reality is that we’re seeing stale longs exiting on mass.
The loss of support further cements the correction that was already underway and aceclerated the move. The next test for Brent is $40, with $37.50 being an interesting level in WTI.
Deeper correction on the cards for gold
Gold is coming under a little pressure as the dollar wrestles the break its downtrend and move into correction mode.
The greenback is having some luck in early trade this morning and may now look to build on its early successes. The sell-off has been losing momentum since the start of August and today’s breakout could trigger a broader corrective move.
That doesn’t bode well for the yellow metal which was already showing signs of weakness after last month’s sudden plunge and now $1,900 is looking very shaky indeed. Not that this would be catastrophic, the longer terms fundamentals are still bullish for gold, but a deeper correction is looking increasingly on the cards.
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