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Copper Price Holds Out; Oil Price Recovers on Kuwaiti Strike

Copper Price Holds Out; Oil Price Recovers on Kuwaiti Strike

Nathalie Huynh, Contributor


Talking Points:

  • Gold prices eased as safe haven bids faded
  • Oil prices recovered as Kuwaiti workers strike nearly halved production in the short-term
  • Copper prices held out as position unwinding mixed up with demand optimism

Gold prices eased on Tuesday as safe haven bids retreated following a recovery in oil prices and Asian equities. Prices dipped from yesterday’s high although they still held out above $1220. Some downward pressure on prices may materialise after remarks from New YorkFed President Dudley that recent favourable news on the US economy signalled that inflation may return to the Fed’s 2% target over the next few years.

Copper prices slipped as market players unwound long bets, although these losses were scaled back by growing optimism over China’s demand. Chinese economic data from both the first quarter and March month showed a slight pick-up in industrial activities. On the other hand, short term supply concerns on the London Metal Exchange continued to push up a price premium for spot copper over the 3-month futures contract. The downside of prices is supported for now.

Oil prices recovered just as quickly as they plunged on Monday, as a workers strike nearly halved crude production in Kuwait. The protest over public sector pay cuts entered its third day, cuttingoutput to 1.5 million barrels per day from an average of 2.8 million barrels in March, according to news agency KUNA.This provided a temporary relief to crude prices and diverted market’s attention away from a failed output freeze accord.

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GOLD TECHNICAL ANALYSIS – Gold prices eased today although they remained well contained in the 1191-1207.6 range. Momentum lackluster and mixed price action continued to lead gold to choppy trading. Chances for a break out of range are rather slim.

Daily Chart - Created Using FXCM Marketscope

COPPER TECHNICAL ANALYSIS – Copper prices remained resilient above the 2.1485 support level on a fifth day, even as momentum waned somewhat. Copper remains vulnerable on the downside although there is not yet strong enough pressure to forge a clean break below the support level.

Daily Chart - Created Using FXCM Marketscope

CRUDE OIL TECHNICAL ANALYSIS – Oil prices displayed typical pattern of a downward reversal following a double top at 41.87. There is little hindrance on the way down toward 34.79. Upcoming movement in oil prices may be subject to short-term volatility, with a downside bias.

Daily Chart - Created Using FXCM Marketscope

--- Written by Nathalie Huynh, Currency Strategist for

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