Oil gets a reality check
Oil is trading a little higher on Thursday, after pulling back towards the middle of their post summer range over the last couple of sessions.
Crude prices had gathered some significant bullish momentum and were testing the upper end of these ranges despite there still being major downside risks. It seems that trade was a little overcrowded and once the profit taking kicked it, it quickly accelerated back to a more reasonable level.
The expectation of more stimulus may have driven a certain amount of bullishness, with traders coming back to earth with a bang as the optimism fizzles out.
Momentum with gold bulls, for now
Gold is also suffering a little bit of a hangover from all the unjustified optimism over a stimulus deal.
Don’t get me wrong, the talks haven’t collapsed and an agreement is still possible, but there are still big hurdles to overcome and very little time. A reality check is good for these markets and the prospect of no deal before election day seems to be sinking in.
Gold is back around $1,900 so the consolidation continues. Despite the disappointment, the series of higher lows means momentum is still with the bulls and $1,930 is looking a little vulnerable. A break of $1,900 may buck the trend and put some pressure on prices.
