Brent crude oil, gold and aluminium come off their multi-month highs as US markets reopen
Outlook on Brent crude oil, gold and aluminium as US holiday ends.
Brent crude oil’s tumble pauses
Brent crude oil’s recent advance is seen running out of steam below the 55-day simple moving average (SMA) at $85.49 amid increasing recession fears.
The World Bank, World Economic Forum and major US companies all warned of a potential slowdown and recession this year while US banks increased their reserves amid the worsening outlook leading to demand worries for oil ahead of Tuesday’s OPEC and Wednesday’s IEA outlook reports.
At the same time better-than-expected economic growth in the fourth quarter (Q4) in China kept oil prices supported. The Chinese economy grew by 2.9% year-on-year in Q4 2022, down from 3.9% in Q3, but above expectations of 1.8%.
Were Brent crude oil to rise above last week’s high at $85.63, the early January high at $86.93 and the November-to-January downtrend line at $87.54 would be targeted ahead of the October, late November and early December highs at $87.99 to $89.35 which represent key resistance for the medium-term trend.
Support below Monday’s low at $84.03 can be spotted at the mid-December $83.18 high.
Gold comes off its nine-month highs
The price of gold has risen to a new nine-month high at $1,929 per troy ounce during Monday’s US Martin Luther King holiday in little volume before sliding back towards its January support line at $1,905 on Tuesday morning.
Having said that, the precious metal remains above its minor psychological $1,900 level. Even if gold were to consolidate further in the short-term, the medium-term trend will continue to point towards the April 2022 peak at $1,998 and the psychological $2,000 mark as long as the 5 January low at $1,826 isn’t being slipped through.
Below the January support line at $1,905 lie the March 2022 lows at $1,896 to $1,891. Further down last Wednesday’s low can be found at $1,868.
Aluminium short-term consolidates in seven-month highs
Aluminium surged by over 15% from its $2,252 early January low after seven consecutive days of gains on expectations that China’s swift reopening will lead to higher demand for the metal.
It so far rose to $2,629 in January while on its way to the mid-June 2022 high at $2,649 and the May 2022 low at $2,698. The fact that the metal has closed above its $2,576 December peak for two consecutive days is technically significant and means that a long-term bottom has most likely been formed which could lead to further steep price rises taking the aluminium price to $3,000.
Slips should find support around the $2,576 December peak and then along the 200-day SMA at $2,531.
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.
