Oil marks time
Oil continued its volatile but range-bound trading overnight, with Brent crude finishing just 0.30% lower at USD65.75 a barrel and WTI falling 0.25% to USD61.95 a barrel. The directionless trading continues with Asian markets unwinding those overnight losses as both contracts added 25 cents a barrel.
The OPEC+ joint technical committee (JTC) maintained their guidance on oil demand overnight, although they noted the downside risks to it due to Covid-19 and India in particular. That sent oil one dollar lowly briefly, but it quickly regained its poise.
In the meantime, Brent crude has formed short-term support at USD64.50, and resistance at USD66.20 a barrel. Similarly, WTI has formed support at USD60.70, and resistance at USD62.70 a barrel. The charts suggest that the topside is the weaker side of the equation in the near term.
In the bigger picture, Brent crude is trading in a broad USD64.00 to USD68.00 a barrel range, with WTI between USD60.00 and USD64.00 a barrel. I await a break of either side of those ranges to signal oil’s next significant directional move. In the meantime, I expect both contracts to bounce around noisily between those broader support/resistance levels.
Gold marches on the spot
Gold has a non-descript session overnight after a platinum group metal bruising over the previous sessions. Gold rose 0.25% to USD1781.00 an ounce overnight, retreating slightly to USD1780.00 in Asia this morning. Gold seems to content to range each side of USD1780.00 an ounce as investors’ eyes are trained elsewhere into the FOMC.
Gold has initial support at USD1769.00 and USD1763.00 an ounce, followed by the 50% Fibonacci at USD1760.00 an ounce. The triple top formed between USD1796.00 and USD1798.00, the USD1800.00 level, and then the 100-DMA at USD1802.00 an ounce forms a formable layer of resistance to gold’s advance. US dollar strength as shorts are covered pre-FOMC, could see gold longs washed out and a retest of USD1760.00 an ounce.
