Oil prices rise overnight
Speaking of choppy range-trading, oil markets are doing just that this week. Overnight, prices rose, ostensibly because Gulf of Mexico production is struggling to get back on. But when one looks at the ranges of this week, last night’s price increases have merely returned Brent and WTI back to roughly unchanged for the week. That suggests that the street is divided in the near-term direction, as disrupted Gulf of Mexico production is offset by global recovery nerves. So, oil markets are suffering from lots of noise but little substance right now.
Brent crude rose by 1.60% overnight to USD 72.65, adding another 10 cents to USD 72.75 a barrel in Asia. WTI rose by 1.33% to USD 69.30 and has added five cents to USD 69.40 a barrel in Asia. With Asian trading comatose, we are again awaiting New York markets tonight to set the tone.
Brent crude has double tops nearby at USD 72.80 and USD 73.70 a barrel. Support is at USD 71.35, the 100-DMA, and USD 70.50 a barrel. WTI has resistance at USD 69.75 and USD 70.60 a barrel, with support at USD 68.35 and USD 67.70 a barrel.
Gold struggles once again
Gold continues to warn that its upward momentum had waned materially and that its rally is in trouble. Overnight, another bout of US dollar strength saw gold ease by 0.25% to USD 1789.50 an ounce, edging lower to USD 1788.00 an ounce in Asia.
Gold still looks highly vulnerable to further US dollar strength. The short-covering yesterday to USD 1797.50 an ounce in Asia looks like a dead cat bounce. Should the US dollar fall by chance tonight and gold not rally still, the outlook will become darker still.
Gold has nearby resistance at USD 1800.00, followed by the 100 and 200-DMAs at USD 1809.50 and USD 1815.65 an ounce. Support is at USD 1782.50, the overnight low, followed by USD 1780.00 an ounce. If USD 1780.00 fails, gold could fall to USD 1750.00 an ounce.
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