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Gold Price Trend Points Lower, Crude Oil Rebound May Fizzle

Gold Price Trend Points Lower, Crude Oil Rebound May Fizzle

Ilya Spivak, Head Strategist, APAC

GOLD & CRUDE OIL TALKING POINTS:

  • Gold prices rise but 2021 downtrend seems firmly intact for now
  • Crude oil prices need to retake $63.81 to arrest selling pressure
  • Think economic calendar likely to put sentiment trends in focus
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Gold prices edged higher amid what looked like a retracement across a wide range of benchmark assets following the prior day’s risk-off fireworks. For the yellow metal, this meant recovering some ground after issuing the weakest daily close in two weeks. It had fallen alongside shares as sentiment soured in the previous session, which stoked haven demand for the US Dollar and thus undermined anti-fiat alternatives.

Crude oil prices also recovered after hitting a one-month low in the prior session, with the front-month WTI contract erasing nearly all of the prior day’s losses. The rebound shrugged off EIA inventories data showing stockpiles added a larger-than-expected 1.9 million barrels in the prior week. Shipping route disruption may have added to upside pressure as the Suez Canal remains blocked by a large container ship.

Looking ahead, a relatively quiet day on the economic data docket may see broad-based risk appetite trends setting the tone for global markets. Bellwether S&P 500 futures are ticking cautiously higher, hinting that at a cautiously upbeat backdrop. That might help underpin gold and crude oil as the haven USD buying lets up and energy demand hopes flicker, but follow-through probably needs a more meaningful catalyst.

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GOLD TECHNICAL ANALYSIS

Gold prices are idling at support-turned-resistance in the 1747.74-65.30 area. The barrier is reinforced by a falling trend line set from early January. A turn lower from here faces formidable support in the 1634.83-79.81 area, with a midline inflection area near 1660. Alternatively, a daily close above resistance would neutralize near-term selling pressure and may set the stage for a retest of the $1800/oz figure.

Gold price chart - daily

Gold price chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are retesting recently-broken uptrend support levels near the $60/bbl figure as new resistance. A turn back and through swing low support at 57.25 is likely to put the 53.93-54.68 area into focus. Defusing immediate downward pressure probably demands a daily close back above 63.81. Managing as much would probably open the door for another challenge of the peak at 67.98.

Crude oil price chart - daily

Crude oil price chart created using TradingView

COMMODITY TRADING RESOURCES

--- Written by Ilya Spivak, Head Strategist, APAC for DailyFX

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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

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