Oil edges higher, gold steady

Oil prices edge higher

Both Brent crude and WTI rose modestly on Friday as they continued to unwind the mid-week slump. In Asia, hopes of more China stimulus, and a lack of concrete production promises from President Biden’s Middle East visit have seen Brent crude prices climb in Asian trading.

Brent crude finished Friday’s session 1.25% higher at USD 100.80, having tested USD 102.50 intraday. In Asia, it has added another 1.25% to USD 101.80 a barrel. WTI rose by 1.17% to USD 97.60 on Friday, edging 0.3% to USD 97.90 a barrel in Asia today.

Brent crude has resistance at USD 102.50, and then USD 104.00 a barrel, followed by a now distant USD 106.00 a barrel. It has support at USD 98.30 and then USD 97.00, the 200-DMA. WTI has support at USD 94.30, the 200 DMA, and then USD 90.60 a barrel. Resistance is at USD 99.00, followed by USD 101.00 a barrel.

Supply risks remain evident in international markets, and futures curves remain in backwardation. Despite the ructions in the speculative futures markets, the real-world dynamic remains as supportive of oil prices as ever. If Russian doesn’t switch gas exports back on to Europe at the end of the week, Brent crude could once again, find itself back near USD 110.00 a barrel.

Gold remains unimpressive

Gold was notable on Friday; it felt no positive spillover impact from the risk sentiment rally that swept other asset classes. Gold finished Friday’s session 0.15% lower at USD 1707.50 an ounce. In Asia, continued US dollar weakness has allowed it to show some belated gains, rising 0.50% to USD 1715.70 an ounce in yet another quiet Asian session.

Overall, gold’s price action continues to be uninspiring with recoveries limited in scope, while the falls, when they do occur, are much larger and faster in scope. Gold’s fate this week rests on the hopes that the investor sentiment rally seen elsewhere, inspires more US dollar weakness this week.

Gold has initial support at USD 1700.00, followed by the more important USD 1675.00 an ounce zone. A sustained failure of USD 1675.00 will signal a much deeper move, targeting the USD 1450.00 to USD 1500.00 an ounce regions in the weeks ahead. Gold has resistance nearby at USD 1720.00, then USD 1745.00, now a triple top. That is followed by USD 1780.00, USD 1800.00, its June downward trendline.

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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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