Oil consolidates, gold rallies

January 11, 2022 Share Print 0

Oil consolidates

Oil prices eased slightly overnight in corrective price action consistent with a consolidation of oil’s recent impressive price gains. Brent crude fell by 1.0% to USD 81.00, rising to USD 81.30 a barrel in Asia. WTI fell by 0.55% to USD 78.40, rising slightly to USD 78.75 in Asian trading.

Despite prices easing again overnight, oil continues to hold onto almost all its gains since the start of December. Omicron has yet to wreak the havoc of the delta variant and may never do so, keeping the global recovery on track, and OPEC+ compliance means that spare production capacity is limited. Both factors will continue supporting oil’s bullish outlook.

In the nearer term, Brent crude has support at USD 79.60 and the 100-day moving average (DMA) at USD 78.55 a barrel. A rally through USD 83.00 signals more gains to USD 86.00 a barrel. WTI has support at USD 78.00 and USD 77.50 a barrel, with resistance at USD 80.50 and USD 82.00 a barrel.

Gold rallies in Asia

Gold continued range-trading overnight. With US yields moving sideways buyers cautiously push gold higher by 0.30% to USD 1801.75 an ounce overnight. In Asia, the buying momentum has continued, perhaps after North Korea’s latest missile test today. Gold has risen 0.45% to USD 1809.50 an ounce.

Gold has resistance here at USD 1810.00 and USD 1830.00 an ounce. Support lies at USD 1785.00, followed by USD 1780.00 and USD 1760.00 an ounce. Gold continues to drag in hapless bulls to false rallies, and as such, I believe gold will trade in a USD 1775.00 to USD 1815.00 range this week.

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Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022

With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes.

He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays.

A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others.

He was born in New Zealand and holds an MBA from the Cass Business School.