Oil consolidates recent gains
Oil prices consolidated their Monday’s gains overnight in a sideways session for the second day running. US API Crude Inventories fell by just over 3 million barrels, supporting both contracts. Brent crude was unchanged at USD 78.95 a barrel, while WTI edged slightly higher to USD 76.10. Some long-covering is evident in Asia today in an otherwise nondescript session. Brent and WTI have moved 20 cents lower to USD 78.75 and USD 75.90 a barrel.
Brent crude has support at USD 77.20 a barrel, its 100-day moving average (DMA). It has resistance at USD 80.00 a barrel, where it failed overnight. WTI has support at USD 75.00 and then USD 74.35, its 100-DMA. It has resistance at USD 77.00 a barrel, near to its overnight high.
Gold rally falters
Gold probed the topside overnight, eroding resistance at USD 1815.00 but failing ahead of USD 1820.00 an ounce. It then quickly changed course, finishing the day 0.33% lower at USD 1806.60 an ounce. The price action is very much like gold lately, the perpetual bulls pushing prices higher, but then running for the exit at the first sign of trouble or a loss of momentum.
Gold’s attempts to stage a meaningful recovery remain unconvincing, with traders cutting long positions at the very first sign of trouble intra-day. It cleared the double top around the USD 1815.00 region but stalled just above at USD 1820.00. It faces resistance also at USD 1840.00 an ounce. Support lies at USD 1790.00, followed by USD 1780.00 an ounce. USD 1790.00 to USD 1815.00 continues to be my call for the range for the week.
With the US dollar looking more vulnerable to positive virus sentiment at the moment, gold could potentially move higher throughout this week, but I still doubt it could sustain those gains.
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