Gold ticks higher, oil yawns

Opposing forces continue to balance oil prices

Oil had another quiet overnight session by its lofty standards. Brent crude and WTI both gained ground, but were unable to consolidate these gains. Brent crude rose by 0.50% to USD 43.10 a barrel but has given up those gains in Asia, falling by the same to USD 42.70 a barrel. WTI also rose by 0.50% overnight to USD 40.80 a barrel. It too has given up those gains, moving lower to USD 40.40 this morning.

Oil prices now appear to be balanced by opposing forces, leaving both contracts in range-trading mode. On the one hand, the economic recovery in Asian and Europe shows continued signs of accelerating. On the other, the rapidly increasing pace of Covid-19 across the US sunbelt and other countries is growing fears that the US could be in line for a double-dip recession. OPEC+ has also not indicated that they intend to extend the headline production cuts past the end of this morning when tapering is due to begin.

Critical resistance for Brent crude remains at USD 44.00 a barrel and USD 42.00 a barrel for WTI. Neither seems likely to be seriously tested in the short-term. That said, there appears to be little appetite to squeeze long positioning out to the downside either, particularly with the Brent front-end futures curve remaining tight.

Gold continues to grind higher

Gold enjoyed a superb Q2, with gains of 12.3 percent. The safe-haven asset showed its luster as nervous investors snapped up the yellow metal, a response to the severe economic conditions across the globe. Investors are keeping an eye on the lofty level of USD 1800, which was last breached in 2011.

Gold gave bullish traders cheer overnight, shrugging on the powerful rally in equities, rising 0.50% to USD 1784.00 an ounce. A weaker US dollar lent support to gold, with the ongoing increase in Covid-19 cases seeing continued haven buying.

Investors, with one eye on the pandemic, appear to be hedging their bets now, expressing risk and recovery hopes via long equity positions, while hedging those risks by quietly increasing gold longs.

With a series of higher lows over the past week, gold is quietly building strength and momentum for the long-awaited assault on multi-year resistance at USD 1800.00 an ounce. At this stage, we will need to see an acceleration of the US dollar sell-off again for that to happen this week. From a technical perspective, only a move below USD 1760.00 an ounce postpones.

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 Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

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

Latest posts by Jeffrey Halley (see all)