Oil in choppy waters, gold under pressure

Choppy trade ahead?

Oil prices remain very choppy with gains today largely offsetting losses at the start of the week. We may have to wait for more hard-hitting economic data next week before we see the upper or lower ranges tested as the uncertainty appears to be preventing a serious move in either direction.

Should the January data prove to be a blip, it could put pressure on the upper end of the range as longer-term economic prospects improve, while another month of hot data could necessitate much higher rates and threaten a soft-landing, weighing on demand prospects. In the interim, choppy trading looks likely to persist.

Testing major support

Gold is edging lower again this morning, moving ever closer to a very interesting area of support between $1,780 and $1,800. There is a lot of technical support around here from the 50 fib – November lows to February highs – to the 200-day simple moving average. It was also previously a major rotation level and with momentum slipping on approach this time, it could prove to be the case again.

Ultimately, the data may determine how firm a support zone it will be but either way, how it reacts to this level could give a strong indication of sentiment in the markets at this time.

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam