Gold And Oil Are Holding Steady, Where Will They Go Next? – – Daily Cryptocurrency and FX News

Gold And Oil Are Holding Steady

The dollar rallied overnight on January 28 but Brent crude and WTI only saw modest falls. These slight losses may be due to lower than expected official US crude inventories that limited the damage. WTI fell only 0.24% to USD52.60 a barrel while Brent crude fell 0.84% to USD55.55 a barrel.

Both of these contracts were unchanged in the Asian session. Oil rallied back rapidly from its intra-day lows overnight which means that there is a lot of physical buying interest even at such levels. All this rebound appears to be keeping in touch with the Asian recovery and its correlation to significantly high Asian gas prices currently.

In case the US dollar continues with its rallying, nerves may increase about the US recovery pace, and the equity markets fall further, then the prices of oil might encounter more downside pressure. The price action overnight indicates that any form of a rapid drop will be short-lived.

Brent crude is currently bound by some growing resistance at USD56.60 and USD57.40 a barrel. On the other hand, the support has formed at USD54.50 a barrel. WTI has resistance located at USD54.00 a barrel and its support has accumulated at USD51.60 a barrel. Any sustainable clearance of these levels will signal oil’s next directional move.

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Gold Is Stable

Even though gold dropped overnight together with the equity markets and had to deal with a stronger US dollar, its fall was also modest. Gold lost around 0.34% to trade at USD1844.50 an ounce and lost a further 0.53% to trade at $1837.60 in the Asian session.

Bullish gold traders can take some positivity from the price action in the past 24 hours since the previous yellow metal performed much better in the face of massive drops in the equity markets than it has done in recent months. It might mean that gold is benefiting from some haven demand supported by US yields that moved a bit lower in previous sessions.

Resistance in the gold market has formed at $1875 per ounce, followed by the 100-DMA (day moving average) at around $1880.40. It has plunged below the 200-DMA at $1847.50 which has become an intra-day pivot point. Support has formed at the overnight low of $1831.50 followed by the January 18 spike to $1802.50 per ounce.

With the 100DMA and 200DMA gradually converging, a huge directional move by gold is in the offing. The FOMC decision did not offer a strong directional movement. However, the close below the 200-DMA means that gold will now drop lower. The recent price action shows that many buyers are waiting for a dip in the gold market.

Any form of retreat in the gold market might be a slow move lower and not an aggressive form of capitulation. Will the stability continue in the gold and oil markets?

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