Oil’s short-term momentum stalls

In line with price action elsewhere, profit-taking seemed to be the order of the day in energy markets. Both Brent crude and WTI beat a gentle retreat as short-term momentum stalled. Brent crude edged 0.60% lower to USD43.40 a barrel, and WTI fell a modest 0.70% to USD40.70 a barrel. Both contracts are unchanged in Asia in a moribund session.

Although oil prices have stalled, the buffet is gentle and not a prelude to an incipient spin lower. Both contracts are comfortably ranging at the upper end of their recent price levels. Brent crude has critical resistance at USD44.00 a barrel, and USD42.00 a barrel for WTI.

Markets have assimilated the impending increase in OPEC+ production without incident. As long as the price action across financial markets remains corrective, and not structural, oil’s consolidation should continue.


Profit-taking pushes gold lower

Gold fell 0.70% to USD1497.00 an ounce overnight, as investors looked at the price action elsewhere and decided to book profits ahead of the weekend. In line with the flat-line volatility elsewhere in Asia’s session, gold is almost unchanged at USD1498.00 an ounce this morning.

Support in gold remains between USD1480.00 and USD1490.00 an ounce, and as long as this region holds, gold’s price action at these levels remains consolidative, if somewhat directionless. A move through USD1680.00 an ounce implies a deeper correction, possibly as far as USD1750.00 an ounce.

Resistance at USD1819.00 an ounce remains the main barrier to further gold gains. It is unlikely to be tested in the upcoming New York session though, with price action implying another range-trading day is ahead.