Oil and Gold Feel The Cold

Oil and Gold’s price action was underwhelming overnight ahead of the Jackson Hole Symposium. Oil will look for salvation from tonight’s inventory data.


Crude oil contracts closed flat at the end of New York trading after a nascent rally was cut short by the American Petroleum Institute’s (API) Crude Inventory data. Although crude inventories fell by a pleasing 3.6 million barrels, gasoline inventories rose by a surprising 1.4 million barrels, not a good sign during the U.S. summer driving season.

Attention now turns to this evenings official Energy Information Administration’s (EIA) inventory data, with the street looking for drawdowns in crude and gasoline stocks of -3.1 million and -0.5 million barrels respectively. The data will more than likely decide the fate of crude prices this week with a lower than expected drawdown leading to deeper corrections in both Brent and WTI.

Brent spot trades unchanged this morning at 51.55 in directionless trading. Brent’s pricing remains the more constructive of the two contracts due to the backwardation in the front end of the futures curve. But overall, it continues to range trade in a broad 49.70 to 52.70 band, albeit with choppy intra-day price action.

WTI spot also trades unchanged at 47.50 hovering just below its 100-day average at 47.70. Key support comes in at 46.40 with the double top at 48.70 formidable resistance for now.


Gold gave up all its previous day’s gains, closing at 1285.00 overnight, as the U.S. dollar and stocks strengthened overnight. This marks the 4th successive failure of gold to close above 1290.00 in a row and the price action will be disappointing to gold bulls, with the street appearing to be in position squaring mode ahead of the Jackson Hole Symposium.

A deeper correction in the short term cannot be ruled out although in the bigger picture gold’s price action remains constructive.

Gold is trading slightly lower in Asia at 1283.50. Initial support will be found at 1280.00 but it is the 1278.00 level that traders will be watching. This is trend line support dating back to early July. A break of this level could imply a deeper technical correction is on the cards to the 1267.00 region.

After the spike on Friday to 1301.00, gold has marked out three consecutive lower daily highs. From a technical perspective gold now needs to see a daily close above 1301.00 to reinvigorate its upward trend.

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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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