Oil’s recovery continues
Oil prices held on to their Asian gains overnight, after Saudi Aramco signalled rising oil prices to Asian customers over the weekend. The general perception is that despite the noise from the White House, there is very little that President Biden can do to arrest oil price rises, even if he authorises releases from the SPR.
Brent crude finished 1.60% higher at USD 83.60 a barrel, and WTI finished 1.05% higher at USD USD 82.20 a barrel. Some short-term long-covering has pushed both contracts 30 cents lower in Asia, but otherwise, Asian prices are as lethargic as those seen in other asset classes this morning.
Brent crude has resistance at USD 84.50, USD 85.25, and USD 86.00 with support at USD 82.50 and USD 82.00 a barrel. WTI has resistance at USD 83.50 and USD 85.00, with support at USD 81.00 and USD 80.00 a barrel.
Gold holds on to Friday gains
A lower US dollar overnight helped gold advance slightly higher, enabling it to hold on to its substantial gains from the Friday session. Gold finished 0.33% higher at USD 1824.20 an ounce, before easing slightly to USD 1822.75 an ounce in a moribund Asian session. With US bond yields trading on the heavy side and seemingly set to range in the days ahead, and with a downside US dollar correction underway, gold now has a realistic chance of advancing further still in the days ahead.
If gold can break and hold above its well-defined resistance zone between USD 1832.00 and USD 1835.00 an ounce, it will trigger an inverse head-and-shoulders pattern that would target a return to USD 2000.00 an ounce. Support is at USD 1800.00 and USD 1785.00 an ounce, although I suspect that a fall through USD 1810.00 will be enough to trigger a mad fast-money dash for the exit door.
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