The oil rally is back on track

Oil markets powered higher overnight, with the recent bull market correction appearing to have run its course as expected. US dollar weakness boosted black gold, with Brent crude rising 2.0% to USD69.55 a barrel and WTI climbing 1.90% to USD65.90 a barrel. The dollar took a dip as inflation concerns have eased.

Oil markets are trading sideways in Asia, with local markets once again displaying a reluctance to chase prices higher, preferring to buy dips. Both contracts, however, will have Monday’s highs firmly in their sights now that inflation fears have ebbed temporarily.

Brent crude will target the USD71.50 region into next week, and WTI should target the USD68.00 a barrel mark. Only a fall through USD66.50 a barrel for Brent crude or USD63.00 a barrel for WTI delays the rally.

Gold’s price action rings alarm bells

The overnight session should have been fertile ground for gold to continue moving higher. Steady US yields, a weaker US dollar and a strong rally by equities failed to impact gold prices, which instead eased by 0.25% to USD1722.50 an ounce overnight. That negative tone continues in Asia, with gold falling another 0.20% to USD1719.00 an ounce.

Although gold did spike overnight, all that achieved was to trace out a double top at USD1740.00 an ounce. That and the USD1760.00 an ounce breakout point form formidable resistance to any future gold advances now.

Given the unimpressive price action overnight, risks have swung to the downside for gold, which looks set to retest USD1700.00 and this week’s lows at USD1676.00 an ounce next week. Flows out of gold ETFs continue at pace, adding another negative dimension to the gold picture.

Overall, gold is running out of time and excuses with the crypto-market seemingly chipping away at its dollar debasement, inflation-hedging role.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.