Oil markets continue to slumber
Oil prices moved sideways once again overnight, trading in relatively narrow ranges as China growth fears cap the upside of prices, while the Ukraine conflict and the refined petroleum product supply squeeze in the US support the downside. Brent crude finished 0.70% higher overnight at USD 113.35 a barrel, with WTI unchanged at USD 110.55 a barrel.
In Asia, downgraded China GDP growth forecasts and increasing worries about wider virus restrictions in Beijing has pushed oil prices lower. Brent crude has fallen 1.10% to USD 112.05, and WTI is 1.25% lower at USD 109.00 a barrel.
Brent crude has resistance at USD 114.00 and USD 116.00, with support at USD 111.50 and USD 110.50 a barrel. WTI has resistance at USD 112.00 and USD 113.00, with support at USD 108.00 a barrel. Overall, I am expecting Brent crude to bounce around in a USD 111.00 to USD 117.00 range this week.
Gold grinds higher
Gold traded in a wide range overnight, probing above USD 1860.00 as the US dollar weakened, before retreating to finish 0.38% higher at USD 1853.50 an ounce. A rise in US yields probably took the edge off the gold rally, balancing out the weaker US dollar. In Asia, trading is moribund, with gold edging slightly higher to USD 1855.00 an ounce. What is notable, is that gold has held up well in the face of US dollar strength in the Asian session.
The technical picture continues to remain supportive, and it seems only a marked US dollar recovery will cap gold’s rally. Gold took out resistance at USD 1860.00 overnight but has traced out a double top at USD 1865.00 an ounce which could be tough to overcome. That is followed by USD 1885.50, its 100-day moving average. Support is at USD 1845.00 and USD 1840.00, followed by USD 1832.00 an ounce.
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