Brent crude oil, gold and copper slide on demand concerns
Outlook on Brent crude oil, gold and copper amid ongoing US debt ceiling negotiations.
Brent crude oil price falters on demand concerns
Brent crude oil is on track for its second consecutive day of declines as disappointing economic data from the US and China weighs on the demand outlook for the world’s two largest oil consumers.
Technically speaking, Brent crude oil on Tuesday faltered along the April-to-May downtrend line and resumed its two-month descent. A fall through Monday’s low at $73.37 would engage the March and early May lows at $71.40 to $70.09.
Only a bullish reversal to above Tuesday’s high at $75.82 could lead to last week’s high at $77.51 being back in view. Unless this were to happen, a downside bias remains in play for the price of Brent crude oil.
Gold weighs on support line
The price of gold comes further off its early May multi-year high and is about to retest its April triangle support line at $1,985 per troy ounce as President Biden tries to hammer out a deal with House Speaker McCarthy with regards to the US debt ceiling in order to avoid a default on June 1.
If the support line at $1,985 were to be slipped through, the mid-April low at $1,970 would be back in sight.
Resistance above the minor psychological $2,000 mark comes in between $2,005 and $2,009, the late March high, and more significant resistance between $2,022 to $2,032, Monday’s high and the 5 April peak.
Copper drops to six-month low
The price of copper, a leading economic indicator, dropped to levels last traded in November of last year as the global economy slows down, reinforced by disappointing US and Chinese import and growth data out this week.
Earlier on Wednesday copper slid to $8,089 per ton before trying to recover towards its $8,189 January low which may act as resistance, together with the $8,211 20 December trough.
While copper remains below the 200-day simple moving average (SMA) and its last reaction high on the daily chart at $8,346 to $8,363 on a daily chart closing basis, downside pressure should retain the upper hand.
Below $8,089 lies the minor psychological $8,000 mark and sits the $7,850 late November low.
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