Oil remains in consolidation
Oil remains in consolidation, even with crude prices edging a little higher today. The consolidation is occuring around the 200-day moving average, with both Brent and WTI stalling around these levels. It’s interesting that, at this moment in time, there seems little sign of a breakout to the upside or significant correction occuring.
Rather, we appear to be in limbo with OPEC+ monitoring the situation month by month and the outlook remaining unclear. These consolidations typically don’t last but these aren’t normal circumstances. A break above $44 in WTI may trigger some interest again, as may a move below $41.50 but I wouldn’t say that with any real confidence, particularly in reference to the former given how any momentum has just disappeared.
Unfortunate timing for gold
Gold made another push for $2,000 on Tuesday but once again came up short as the dollar staged another comeback. The greenback had just fallen to its lowest level since April 2018 when the positive surprise in the ISM manufacturing PMI saw it spring back to life again, stealing gold’s thunder just as it was looking to clear that major psychological level once more.
US yields remain low though, as they did yesterday in fact, so it may not all be doom and gloom for the yellow metal. The dollar index remains on a downward trajectory and US yields remain low. Another failure at $2,000 is a concern but perhaps it was just bad timing.
