It was an unfortunate night for commodities in general overnight. Base metals declined, with aluminum giving back significant of its Guinea gains.
With New Yorkers worried regarding US growth to start the week, pointing to haven US Dollar strength, oil prices also weakened. Brent crude reduced by 0.80% to $71.50, and WTI declined by 0.70% to $68.30 per barrel.
Both contracts have totaled 10 cents a barrel in a quiet Asia session. In the overall setting, the scale of the overnight oil price reversals was comparatively simple at barely above 50 cents a barrel. Oil’s short-term direction will be directed by what kind of mood New York appears in this evening, as nothing has materially modified in the markets this week. Although admittedly, oil’s gathering had seemed like working low on force last week, even as the US Dollar weakened. The slowing of higher rate after the US data, economic improvement doubts, and US Dollar strength had increased the chances of a deeper descending price move.
Brent crude has doubled tops at $72.80 and $73.70 per barrel. Support is close at $71.25, the 100-DMA, and $70.50 per barrel. That could point to a test of $70.00 per barrel, and failure will probably trigger stop-losses in volume. The ensuing spike lower would be, once repeatedly, a buying chance.
WTI closed under its 100-DMA overnight today at $68.75, which now produces initial resistance. That is supported by $69.50 a barrel. The support rests at $67.70 and $67.00 a barrel. If WTI breaks at $67.00, a more profound and more dynamic capitulation could occur. But like Brent, it is a dip for the brave to buy into.
Gold falls on US Dollar strength
Gold has been threatening for several days that its higher momentum had declined materially, and its rally was in trouble. Distinctly, in earlier sessions, gold had been powerless to rally on US Dollar instability. Overnight, a slight rise in US yields and a difficult period of US Dollar strength set the descending correction in action. Gold ended the overnight session 1.60% weaker at $1794.00 an ounce.
Gold looks highly exposed to additional US Dollar strength this evening. Although some short-covering has raised gold somewhat higher to $1797.50 per ounce in Asia, it seems like a dead cat bounce. Should the US Dollar declined by accident tonight and gold not return yet, the outlook will shift darker still.
Gold has a nearby stand at $1800.00, backed by the 100 and 200-DMAs at $1809.50 and $1815.65 per ounce. Support stands at $1792.50, accompanied by $1780.00 per ounce. If $1780.00 crashes, gold could drop to $1750.00 per ounce.