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Crude Oil Advances Towards $96, Gold and Silver Slip at Key Resistance

Crude Oil Advances Towards $96, Gold and Silver Slip at Key Resistance

David de Ferranti, Currency Analyst

Talking Points

  • Crude Oil Moves Above $95 on Bullish Global Demand Outlook
  • Gold Prices Plunge Following Test of Key Resistance at $1,256
  • Copper Coiled Like A Spring Within Ascending Triangle Pattern

Crude Oil surged above the $95 handle as an upward revision by the IMF to their global growth forecast stoked traders’ demand for the growth-sensitive commodity. Buying support was reinforced as a separate report from the International Energy Agency (IEA) suggested that the economic recovery in the US would help bolster demand.

A light economic docket for the session ahead may not offer traders a specific catalyst to fuel further gains for the WTI contract. However, as European and US equity futures edge cautiously higher, a general lean by traders towards risk assets may help it hold around the $95.50 level.

Meanwhile, gold turned lower from chart resistance in a move that may have reflected profit-taking after prices hit a six-week high yesterday. Investors are questioning the allure of gold in an environment where inflation remains benign and the US Federal Reserve moves closer to monetary policy normalization. With little formative event risk ahead, technical levels may help provide some guidance for traders.

CRUDE OIL TECHNICAL ANALYSIS Crude broke above the 38.2% Fibonacci retracement level and looks to be trading towards resistance at the psychologically significant $96 handle. The short term trend appears to be shifting to the upside, with prices having moved above the 20 SMA in intraday trade.

Crude_Oil_Advances_Towards_96_Gold_and_Silver_Slip_at_Key_Resistance_body_Picture_4.png, Crude Oil Advances Towards $96, Gold and Silver Slip at Key Resistance

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Gold has failed to break above selling pressure around the $1,256 mark, which continues to act as near-term resistance. An Evening Star candlestick formation is warning of a potential short-term reversal, with prices eyeing the 38.2% Fib retracement level as immediate support.

Crude_Oil_Advances_Towards_96_Gold_and_Silver_Slip_at_Key_Resistance_body_Picture_3.png, Crude Oil Advances Towards $96, Gold and Silver Slip at Key Resistance

Daily Chart - Created Using FXCM Marketscope 2.0

SILVER TECHNICAL ANALYSIS Sellers have once again emerged near the key resistance zone around $20.48 (the 38.2% Fibonacci retracement level). With volatility sitting near its yearly low, range trading strategies are preferred. Buying support remains at $19.

Crude_Oil_Advances_Towards_96_Gold_and_Silver_Slip_at_Key_Resistance_body_Picture_2.png, Crude Oil Advances Towards $96, Gold and Silver Slip at Key Resistance

Daily Chart - Created Using FXCM Marketscope 2.0

COPPER TECHNICAL ANALYSIS Copper is coiled like a spring within an ascending triangle pattern, suggesting a breakout may be imminent. A break above resistance at $3.36 would favour an advance towards the $3.42 monthly high.

Crude_Oil_Advances_Towards_96_Gold_and_Silver_Slip_at_Key_Resistance_body_Picture_1.png, Crude Oil Advances Towards $96, Gold and Silver Slip at Key Resistance

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by David de Ferranti, Market Analyst, FXCM Australia

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Contact and follow David on Twitter: @DaviddeFe

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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