Gold was up 1.05% to USD1881.00 an ounce in precious metals overnight. The rally on equity markets and decline in the US dollar pushed the gold bulls to return to the market.
The yellow metal has edged higher again in Asia to USD1883.00 an ounce. Regional players were seemingly keen to add to longs this morning.
South Korea and China are starting holidays tomorrow and Thursday. With that, risk-hedging flows from the region should support gold prices.
Gold has traced out multi-day support at USD1850.00 an ounce. Additionally, it is supported by its 100-DMA, today at the same level.
Resistance is nearby at USD1885.00 an ounce. A break of USD1900.00 an ounce is likely to spur some stop-loss buying. Moreover, flushing more longer-term bullish traders out of hiding.
Holidays and event risks are piling up throughout the rest of the week. Nevertheless, gold is unlikely to break its USD1850.00 an ounce support region.
Oil Rallies with Equity Markets
Meanwhile, oil prices jumped in energy commodities, overnight as equity markets moved higher. This rise leads to a squeeze on short-term speculative oil positioning.
Brent crude rose by 1.75% to USD42.50 a barrel while WTI rose 1.10% to USD40.50 a barrel. The rally has quickly run out of steam in Asia, as both contracts gave back some of their overnight gains. Brent crude was down to USD42.10 a barrel, and WTI fell to USD40.25 a barrel.
The price action suggests that the underlying bearish drivers are still ascendant. This is albeit the speculative community is still short, based on futures data.
Furthermore, that is reduced consumption and a global oversupply by producers. That equation should continue to put a limitation on oil gains in both size and time duration.
With that, oil has traced out notable support over the past week. On Brent crude, the 100-DMA has paused price drops over the past week.
The 100-DMA is at USD41.65 a barrel today and should still provide support. Moreover, WTI’s 100-DMA is at USD39.15 a barrel today, and this region has supported prices over the past week.
The underlying supply/demand situation internationally means both lack the momentum to sustain strong rallies. This is despite both contracts now having strong technical support
Commodity news reports, Brent crude was at USD42.00 a barrel, and WTI was at USD40.00 a barrel. Having said, they are looking close to equilibrium levels for now.