Oil corrects lower in Asia markets
Oil prices were mostly steady overnight with Brent crude and WTI almost unchanged at USD56.00 and USD53.00 a barrel respectively. In line with the more cautious tone displayed by financial markets today in Asia, both contracts have retreated. Brent crude is down 1.05% to USD55.45 a barrel, and WTI has fallen 1.0% to USD52.45 a barrel.
The fall this morning leaves both contracts in the middle of their two-week ranges. They could be potentially vulnerable to deeper corrections if this evening’s official US Crude Inventory data shows an unexpected climb.
Brent crude’s immediate resistance is at USD57.40 a barrel, with losses likely to be limited to USD54.50 a barrel. WTI has substantial resistance ahead of USD54.00 a barrel with support between USD51.80 and USD52.00 a barrel likely to restrict any pullbacks.
Gold’s momentum wanes
Gold had a nondescript session overnight, closing almost unchanged at USD1870.00 an ounce. The Biden fiscal stimulus tailwind has faded for now. As concerns rise, life in the US Senate will not be as easy a path as the markets had assumed, and somewhat optimistically hoped for. Nevertheless, gold is now consolidating its recent gains even if it lacks the momentum to trace out new highs.
The cautious tone struck by Asian markets has weighed on gold as well today. Gold has edged lower by 0.35% to USD1863.00 an ounce. Despite the noise, I said earlier in the week that gold would likely trade in a roughly USD1820.00 to USD1870.00 an ounce range, and today’s price action seems to be bearing that out. For now, like other markets, gold is waiting for fresh inputs to set its next directional move.
Gold faces resistance nearby at its 100-day moving average (DMA) at 1883.50 an ounce, followed by the USD1900.00 and USD1920.00 an ounce. The nearest support intraday is ominously distant around USD1833.00 an ounce, followed by USD1800.00 an ounce.