Oil creeps higher overnight but remains mid-range
The impressive US labour data lifted Brent Crude and WTI higher overnight, although only into the upper side of their respective one-month ranges. Like currency markets, nagging doubts remain about the US economy, with the employment data collected before the spiralling Covid-19 cases in the US Sunbelt.
Brent crude rose 1.85% to USD 42.90 a Barrel, with monthly resistance at USD 44.00 a barrel, and monthly support around USD 40.00 a barrel. WTI rose 1.55% to USD 40.40 a barrel. It has resistance at USD 41.60 a barrel, and support at USD 37.00 a barrel in the greater picture. Oil is unchanged in Asian trading as markets content themselves to sit out the US holiday.
Both Brent crude and WTI have quietly ground higher this week, supported by improving economic data from around the world. Lingering Covid-19 and geopolitical concerns, however, are tempering the momentum required to challenge their monthly highs for now. Oil should remain supported this afternoon on the expected positive monthly services PMI’s to be released across Europe today.
Gold finds eager buyers on dips overnight
Gold once again probed support at USD 1760.00 an ounce overnight, and once again rallied strongly of that level. It raced higher from the lows, to close at USD 1776.00 an ounce. That was despite the impressive US employment data adding to the global recovery narrative. The hike in US treasury yields after the Non-Farms quickly ran out of steam, and partially supported Gold,
Nagging doubts appear to remain in investors’ minds though, about the explosion of Covid-19 cases in the US Sunbelt states and its possible negative effect on the recovery going forward.
Geopolitical considerations are also to the fore, with the US Congress passing its China sanctions bill. China also threatened the US, Britain and Australia with unspecified retaliation over their HK security bill stance. With a holiday in the US and the weekend upon us, some haven-directed buying of gold is evident
The price action in gold has been surprisingly constructive to me. Support is at USD 1760.00 an ounce with resistance is at USD 1790.00 an ounce. I expect those levels to contain gold into the week’s end. Only a fall through USD 1745.00 an ounce invalidates the bullish outlook. Although the gold price action is positive, it still lacks the momentum to mount a serious challenge on USD 1800.00 an ounce.
Gold is unchanged in moribund Asian trading and the lack of activity has continued in European trade.
This post first appeared on MarketPulse - MarketPulse - MarketPulse Is The Mar, please read the originial post: here