Oil seeing profit taking
Oil is seeing some profit taking, it seems, just as WTI was preparing its assault on $60. There still appears to be plenty of momentum in the rally so that push may still come but it’s been on a strong run and with holiday’s now in various countries, it seems a sensible time to be seeing a pull back.
Another large inventory drop on Wednesday gave oil prices a little pop but we’ve quickly seen this undone as profit taking kicked in. Fundamentals still look good for crude markets though. We’re edging ever closer to economies reopening and people breaking free of their homes and, who knows, maybe even their borders. A demand surge in summer should continue to be supportive for oil prices, as long as OPEC+ doesn’t pull back too quickly and we don’t see a surge in US shale output.
Gold stumbles as dollar finds support
The dollar has found some support in recent days as the index approached the key 90 level, a break of which would be bad news for the greenback and music to the ears of gold bulls.
Instead we’re seeing a rebound, with the dollar index above 90.5. A move above 91 would be a psychologically significant move, with it having been the neckline of the inverse head and shoulders and coming after it rotated off key fib levels.
All of this could be bad news for gold which had been enjoying some reprieve and rebounded as high as $1,855. It’s now heading lower once again and could soon test $1,800, the first test of support. Below here, $1,785 and $1,765 are key, the February and November lows, respectively.