Oil jumps, gold steady on Omicron

Oil surges on lower omicron concerns

Oil prices rose overnight as omicron concerns continued to fade, and US API Crude Inventories showed a surprise draw of 3.1 million barrels. Assuming momentum remains positive in global markets, a fall in official US Crude Inventories (-1.7 mio exp), will probably be an excuse for oil prices to rally once again. Base metals are also rallying in Asia today, as is natural gas, ostensibly on expectations of much higher infrastructure spending in 2022. If that is so, then oil prices have also found another reason to be bullish in 2022.

Brent crude rose by 2.0% to USD 75.10 overnight where it remains in Asian trading. WTI leapt 2.45% higher to USD 71.70 a barrel, where it remains in Asia. Both contracts have recovered above their respective 100-day moving averages with initial resistance at USD 76.00 and WTI USD 73.00 respectively. I continue to believe that the lows of last week will be the lows for possibly all of next year.

Gold creeps higher

The wave of omicron-inspired growth optimism sweeping financial markets overnight appears to be tempting a few gold bulls back into the market in search of a bargain. Gold rose 0.30% to USD 1784.00 an ounce overnight, adding another 0.35% to USD 1790.00 an ounce in Asia today. Gold could well continue staging a modest recovery this week, as long as sentiment remains positive.

In the bigger picture, gold still looks confined to a USD 1770.00 to USD 1800.00 range this week, unable to sustain momentum above or below those levels. The 50,100 and 200-day moving averages (DMAs), clustered between USD 1790.60 and USD 1795.00 provides immediate resistance, followed by USD 1800.00, and then USD 1810.00. Support lies at USD 1770.00 and USD 1760.00.

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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