Oil edges higher, gold range trading

Oil markets remain on the sidelines

Oil markets maintained their wait-and-see approach to the noise and tail-chasing seen elsewhere overnight. The Colonial pipeline cyberattack saga is dragging on and is now causing material shortages in the Eastern United States. However, that served only to lift crude prices slightly overnight. Brent crude rose 0.65% to USD68.65 a barrel, and WTI rose 0.90% to USD65.40 a barrel. In Asia, both contracts have edged 10 cents lower in directionless trading.

Brent crude has resistance at USD70.00 and thenUSD71.50 a barrel. It remains clear of its two-month support line, today at USD67.10 a barrel, followed by USD66.00 a barrel. WTI remains dead centre of its near two-month rising channel bounded by USD63.00 and USD67.50 a barrel. Only a failure of USD63.00 would disrupt the longer-term bullish picture. Interim support and resistance lie at USD64.00 and v66.00 a barrel, respectively.

Tonight’s official US Crude Inventories should provide some volatility, particularly the refined product sub-indexes. Colonial should keep both contracts, especially WTI, supported on any dips over the next 24 hours.

Gold: big ranges but small changes

Gold traded in a 25 dollar range overnight, testing support at USD1820.00 an ounce, before rising once again to finish 0.10% higher at USD1837.50 an ounce. In Asia, a stronger US dollar has pushed gold 0.40% lower to USD1830.00 an ounce.

Overall, gold remains impressively resilient as US yields firmed up for the second day in a row. The 200-DMA at USD1851.00 an ounce remains formidable resistance, but gold now has clear support at v1820.00 an ounce. That is followed by support at USD1800.00 an ounce and the 100-DMA at USD1796.00 an ounce.

Gold’s reaction to the US yields will significantly define its direction for the remainder of the week if they rise after a higher US CPI tonight. If it remains steadfast, then that bodes well for a test of USD1850.00 and further rallies to USD1900.00 an ounce in the days ahead. A low-ball CPI should prove equally supportive for gold as well.

Even if US yields provoke an adverse reaction from gold tonight, the technical picture suggests that support between USD1795.00 and USD1800.00 remains firm.

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.