Oil gains ground, gold consolidates

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.

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, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was 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 and Channel News Asia as well as in leading print publications such as 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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