Oil steady, gold range-trades

Oil is steady in Asia

Oil’s intraday gains overnight were pared back in New York as US yields and the US dollar climbed, leaving both Brent crude and WTI slightly lower for the session. Brent crude finished 1.05% lower at USD 119.95 a barrel, and WTI finished 1.10% lower at USD 119.00 a barrel. Asian markets are very much in wait-and-see mode, with Brent crude slightly higher at USD 120.15 a barrel and WTI edging higher to USD 119.25 a barrel.

Whichever way you look at it though, both Brent and WTI prices are nearing post-Ukraine highs, stripping at the days of the initial hostilities themselves. Returning Venezuelan and Libyan production to Europe and North America, should it occur, will not be material enough in the shorter term to force prices lower. Refining margins globally suggest that demand for petrol and diesel remain in heavy demand, with the refining logjam in refined products backstopping crude prices.

Additionally, the damp squib OPEC+ meeting outcome, with some production bones thrown to some angry dogs, and a potential recovery in demand from mainland China has got on top of omicron, provides yet more reasons to believe that physical demand will keep prices elevated.

Brent crude has resistance at USD 122.00, and USD 124.00, with support distant at USD 116.00 and USD 112.50 a barrel. WTI has resistance at USD 121.00, with distant support at USD 115.00 and USD 111.25 a barrel.

Gold’s flip-flop ranging continues

Gold continues to bore traders to death as range trading and reversals by a thousand cuts continue. Overnight, a stronger US dollar and firmer US yields pushed gold 0.50% lower to USD 1842.00 an ounce, where it remains in yet another moribund Asian session.

The chart picture shows gold is now eroding resistance at USD 1870.00, touching USD 1874.00 an ounce on Friday. But overall, resistance at USD 1870.00 remains intact, followed by the 100-DMA at USD 1889.00, and then USD 1900.00. Support at USD 1844.00 has given way, opening further falls to USD 1830.00  and then USD 1780.00 an ounce. I do not discount a disorderly retreat if the latter fails.

Gold remains at the mercy of intraday directional moves by the US dollar and US yields.

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