Oil Slips As Gold Rallies
Jeffrey Halley | Oct 10, 2017 02:15AM ET
Crude oil traded sideways overnight while gold’s rally continued, with volatility dampened by a U.S. and Japan holiday.h2 Oil/h2
Crude prices finished broadly unchanged overnight with a U.S. holiday meaning New York trading was subdued. Both Brent and WTI took some solace by comments from the OPEC Secretary-General that they were working to create an extension to the production cut deal ahead of the November OPEC meeting.
The comments only temporarily shook crude from its malaise with the rally quickly running out of steam with Brent and WTI closing at 55.80 and 49.40 respectively. Both contracts retain a consolidative look about them near the lows of last week’s trading range, suggesting both are still vulnerable to downside pressure.
Brent trades at 55.95 with support at 55.15 and 54.15 its long-term support line. Resistance is nearby at 56.10 before the double top at 57.35.
WTI trades at 49.50, just above its 200-day moving average at 49.20, the next support being 48.80. Resistance is at 50.50 and then 51.00.
Gold’s recovery continued overnight, powering higher by nine dollars to close in New York at 1284.00. With the U.S. session holiday thinned, trading volumes were light, but gold continues to be supported by the ratcheting higher in geopolitical tensions in the Middle East and the Korean peninsula. With the dollar stable overnight, the key will be if gold can hang on to its gains if tensions ease. If so, this may signal that the worst of the correction is now behind us.
Gold trades at 1282.75 and has initial resistance at 1286.00 followed by 1291.00 and 1296.00. The 100-day moving average at 1284.00 this morning will be intra-day support. The crucial level now being Friday’s low at 1260.00. A break of this region suggesting that the pain is not over for long positioning.
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