Brent and gold stabilise while sugar remains bid on strong China data
Outlook on Brent crude oil, gold and sugar as China sees better-than-expected GDP, industrial output and retail sales data.
Brent recoups some of Monday’s losses on strong China data
Brent crude oil’s slip from last week’s 2 ½ month $87.19 high on mounting recession fears leading to a possible drop in demand has been countered by strong data out of China showing that its economy grew by more than expected in the first quarter, its industrial output gained the most in five months and retail sales grew by the most in two years.
With the post-pandemic recovery looking to be well on track and demand for oil likely to rise, the price of oil recouped some of its recent losses with the front month Brent crude oil futures contract heading back up towards the $85.00 mark.
As long as Monday’s high at $86.23 isn’t bettered, however, further slips in the price of oil may be seen as investors globally are getting increasingly worried about the outlook for growth and interest rates.
The current April lows at $83.59 to $83.46 may thus be revisited with parts of the March-to-April gap down to $79.92 possibly also being filled. Immediate resistance sits at the early April high at $85.94.
Gold oscillates around the $2,000 mark
Gold’s reversal lower from its one-year $2,048 per troy ounce mid-April peak on the back of an appreciating US dollar which recovered from its one-year low on recent better-than-expected US data has taken the precious metal back to its $1,982 10 April low which so far holds.
Were it to be slipped through, however, at least a minor top would likely be formed with the February high at $1,959 representing the next downside target ahead of the $1,950 to $1,935 support zone which consists of the late March and early April lows.
Resistance can be spotted at the $2,003 to $2,009 late March highs ahead of the 5 April high at $2,032.
Price of sugar nears its eleven year high
The steep ascent in the price of sugar (no. 11 front month futures), due to production bottlenecks in key producer nations and countries like India throttling their exports, leading to strong global demand not being met, has last week taken it to an eleven year high at $24.29 for 112000 pounds of raw cane sugar.
The minor retracement lower since then to $23.25 on Friday was followed by another up leg early this week which targets the $24.00 July 2012 high, above which sits the September 2016 peak at $24.09 ahead of last week’s $24.29 high point.
The $24.00 to $24.29 key resistance zone may well cap the current advance in the near future in which case a fall through Friday’s low at $23.25 on a daily chart closing basis could lead to a top being formed, just as in 2012 and 2016.
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