Gold on Hold, China Lifts Oil

Oil rises on China trade data.

 

With US markets closed, oil was sideways in Seattle overnight. Brent crude closing almost unchanged at $72.10, and WTI closing at $68.80 a barrel. The impressive China trade data has lifted fears over the China slowdown, which has led to higher oil prices in Asia. Brent crude and WTI rising by over 0.55% to $72.65 and $69.10 a barrel, respectively.

 

With economic deceleration fears ebbing, oil prices in Asia should remain supported for the remainder of the session. That said, oil really needs to move higher on New York’s return today, or loss of momentum fears will regain the ascendancy after the V-shaped recoveries over the past week and a half.

 

Brent crude has resistance at $72.60, a triple-daily top, and $73.70 a barrel. A fall through the 100-DMA at $71.20 a barrel signals a retest of $70.50 and $70.00 a barrel. Things could get ugly below $70.00 a barrel. WTI has resistance at $70.50 a barrel with support at the 100-DMA at $68.70, which held overnight. Failure could see support at $67.00 a barrel threatened.

 

Gold awaits New York’s return.

 

Gold remains in a holding pattern awaiting the US markets return this evening, trading at an almost unchanged $1822.00 an ounce in a quiet Asian session. 

 

The rally on Friday was unimpressive, despite the headline figure. The Non-Farm Payrolls miss was a ripe environment for gold to stage a powerful rally as Fed tapering fears were swept off the table. Instead, a modest rally that never threatened the formidable resistance zone lying just above between $1830.00 and $1834.00 an ounce was all gold could manage.

 

Although a daily close above $1835.00 an ounce clears the technical picture for a move to $1900.00, gold appears to be running out of time to do so. The price action on Friday reinforces that gold’s upward momentum is waning. 

 

Gold investors must now hope that US traders return to the office tomorrow and start selling US Dollars meaningfully to keep hopes of higher prices alive. If gold falls through support bounded by the 100 and 200-DMAs at $1815.90 and $1809.60 an ounce, gold could fall to $1780.00 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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