Oil dips lower, gold yawns

Oil corrects lower in Asia markets

Oil prices were mostly steady overnight with Brent crude and WTI almost unchanged at USD56.00 and USD53.00 a barrel respectively. In line with the more cautious tone displayed by financial markets today in Asia, both contracts have retreated. Brent crude is down 1.05% to USD55.45 a barrel, and WTI has fallen 1.0% to USD52.45 a barrel.

The fall this morning leaves both contracts in the middle of their two-week ranges. They could be potentially vulnerable to deeper corrections if this evening’s official US Crude Inventory data shows an unexpected climb.

Brent crude’s immediate resistance is at USD57.40 a barrel, with losses likely to be limited to USD54.50 a barrel. WTI has substantial resistance ahead of USD54.00 a barrel with support between USD51.80 and USD52.00 a barrel likely to restrict any pullbacks.

Gold’s momentum wanes

Gold had a nondescript session overnight, closing almost unchanged at USD1870.00 an ounce. The Biden fiscal stimulus tailwind has faded for now. As concerns rise, life in the US Senate will not be as easy a path as the markets had assumed, and somewhat optimistically hoped for. Nevertheless, gold is now consolidating its recent gains even if it lacks the momentum to trace out new highs.

The cautious tone struck by Asian markets has weighed on gold as well today. Gold has edged lower by 0.35% to USD1863.00 an ounce. Despite the noise, I said earlier in the week that gold would likely trade in a roughly USD1820.00 to USD1870.00 an ounce range, and today’s price action seems to be bearing that out. For now, like other markets, gold is waiting for fresh inputs to set its next directional move.

Gold faces resistance nearby at its 100-day moving average (DMA) at 1883.50 an ounce, followed by the USD1900.00 and USD1920.00 an ounce. The nearest support intraday is ominously distant around USD1833.00 an ounce, followed by USD1800.00 an ounce.

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 as well as in leading print publications including 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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