Gold on Hold, China Lifts Oil

Oil rises on China trade data.

With US markets closed, oil was sideways in Seattle overnight. Brent crude closing almost unchanged at $72.10, and WTI closing at $68.80 a barrel. The impressive China trade data has lifted fears over the China slowdown, which has led to higher oil prices in Asia. Brent crude and WTI rising by over 0.55% to $72.65 and $69.10 a barrel, respectively.

With economic deceleration fears ebbing, oil prices in Asia should remain supported for the remainder of the session. That said, oil really needs to move higher on New York’s return today, or loss of momentum fears will regain the ascendancy after the V-shaped recoveries over the past week and a half.

Brent crude has resistance at $72.60, a triple-daily top, and $73.70 a barrel. A fall through the 100-DMA at $71.20 a barrel signals a retest of $70.50 and $70.00 a barrel. Things could get ugly below $70.00 a barrel. WTI has resistance at $70.50 a barrel with support at the 100-DMA at $68.70, which held overnight. Failure could see support at $67.00 a barrel threatened.

Gold awaits New York’s return.

Gold remains in a holding pattern awaiting the US markets return this evening, trading at an almost unchanged $1822.00 an ounce in a quiet Asian session. 

The rally on Friday was unimpressive, despite the headline figure. The Non-Farm Payrolls miss was a ripe environment for gold to stage a powerful rally as Fed tapering fears were swept off the table. Instead, a modest rally that never threatened the formidable resistance zone lying just above between $1830.00 and $1834.00 an ounce was all gold could manage.

Although a daily close above $1835.00 an ounce clears the technical picture for a move to $1900.00, gold appears to be running out of time to do so. The price action on Friday reinforces that gold’s upward momentum is waning. 

Gold investors must now hope that US traders return to the office tomorrow and start selling US Dollars meaningfully to keep hopes of higher prices alive. If gold falls through support bounded by the 100 and 200-DMAs at $1815.90 and $1809.60 an ounce, gold could fall to $1780.00 an ounce. 

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