Oil eases, gold falls as dollar rises

Oil slightly softer in Asia

Oil prices eased slightly on Friday, robust US data and weekend risk supporting prices, while US SPR releases as well as yet to be determined ones from other IEA members capped gains. A UN-brokered two-month ceasefire between Saudi Arabia and Yemen’s Houthi rebels has had no noticeable impact on prices today.

The China holiday is definitely muting trading volumes in Asia today, leaving Brent crude unchanged at USD 104.50, and WTI unchanged at USD 99.35. With mainland China, Hong Kong and Taiwan all on holiday tomorrow, I expect the first part of the week in Asia to be quiet.

Overall, I still expect Brent to trade in a choppy USD 100.00 to USD 120.00 range, with WTI bouncing around in a USD 95.00 to USD 115.00 a barrel range. The US SPR and monthly OPEC+ production hikes balanced out by geopolitical tensions elsewhere.

Gold fades as US dollar strengthens

Gold finished Friday on the back foot, falling 0.62% to USD 1925.00 an ounce. Higher US yields and a firmer US dollar continue to erode gold’s recent gains, with gold falling 0.37% to USD 1917.80 an ounce in Asia. A retreat below nearby support at USD 1915.00 an ounce should signal another test of USD 1900.00.

The risks of a material correction lower in gold are now increasing sharply, as it failed to make any gains when both the US dollar and US yields fell at times last week. Ominously, it moved lower as soon as they both rose. Gold has resistance at USD 1940.00 and USD 1950.00 an ounce. Meanwhile, a sustained break of the USD 1880.00 region will probably trigger a capitulation trade, potentially pushing gold down to USD 1800.00 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

Latest posts by Jeffrey Halley (see all)