WTI drops on recession fears while gold and silver rally on flight to safety
Outlook on WTI, gold and silver ahead of Wednesday’s anticipated Fed 25 basis-point rate hike.
WTI drops to five-week low
The slide in the price of crude oil is gaining traction with WTI now trading at levels last seen in late March whilst approaching the December trough at $70.25 and the minor psychological $70 mark ahead of Wednesday’s US Fed rate hike decision.
Failure at the $70 mark would open the way for the March trough at $64.37 to be back in focus.
Good resistance now sits between the January and February lows at $72.50 to $72.64 as well as at the late April low at $73.88. While the accelerated downtrend line at $75.42 isn’t overcome on a daily chart closing basis, further downside pressure is likely to take the price of oil lower still as recessionary fears grow.
Gold benefits from safe haven inflows
The gold price has finally broken out of its three-week triangle formation and did so to the upside on safe haven flows as the US regional bank index slid by 6% on contagion fears on Tuesday.
The early April high at $2,032 per troy ounce is thus being eyed, a rise above which would push the April peak at $2,048 back to the fore.
Upside pressure should be maintained while the recent lows seen on the daily chart between $1,978 and $1,970 underpin. Minor support above these levels comes in along the breached triangle resistance line – now because of inverse polarity support line – at $2,006 and around the psychological $2,000 mark.
Silver trades near its one-year highs
The 28% rally in the price of silver from just below the $20 per troy ounce mark in early March gave way to some sideways consolidation over the past three weeks with last week’s low at $24.50 offering good support.
While it underpins, another attempt at reaching this years April and current May highs at $25.91 to $26.09 remains at hand. If overcome, the April 2022 high at $26.22 could be reached.
Only a currently unexpected fall through the $24.50 low would make us question our medium-term bullish forecast.
Related articles
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
