Brent crude oil, gold and copper stall ahead of US CPI data release
Outlook on Brent crude crude oil, gold and copper ahead of Tuesday’s US CPI data.
Brent crude oil drops to early January lows on risk-off sentiment
Brent crude oil’s decline accelerated to the downside on Monday on global risk-off sentiment as the collapse of Silicon Valley Bank raised concerns about a broader financial crisis.
The oil price dipped to a ten-week low at $78.08 per barrel despite a weaker US dollar before heaving itself back towards the $80 region at the end of Monday’s session.
While Tuesday’s intraday high at $80.65 isn’t overcome, immediate downside pressure should remain in play with the February low at $79.04 representing the first downside target, followed by Monday’s through at $78.08. Were it to give way, the December-to-January lows at $75.65 to $75.32 would be targeted next.
Minor resistance above $80.65 comes in at the 17 February low at $81.62 and also at the 3 March low at $82.28. While the next higher Friday high at $83.05 isn’t overcome, downside pressure should retain the upper hand.
Strong gold rally may lose upside momentum
Gold’s three-day over 5% advance on global risk-off sentiment and flight-to-safety flows out of equities and into the precious metal is likely to pause, at least in the short-term, ahead of Tuesday’s widely awaited Consumer Price Inflation (CPI) data release.
Were further upside to be witnessed, the mid-January high at $1,929 per troy ounce would be in focus, followed by the February peak at $1,959 and then probably also the major psychological $2,000 mark.
Minor support can be found at the 9 February high at $1,890 and more significant support at Friday-to-Monday’s price gap and 55-day simple moving average (SMA) at $1,871 to $1,870.
Copper price bounces off key support amid global risk-off sentiment
Monday’s intraday slide in the price of copper on the back of global risk-off sentiment has taken it back to the technically important November-to-December highs at $8,629 to $8,593 per ton which make up a significant support area by slipping to $8,638 before rallying strongly on the back of a weaker US dollar.
A rise above Monday’s potentially bullish Hammer formation on the daily candlestick chart at $8,949 would skew the odds towards renewed upside being seen in which case a rise above the 55-day SMA at $8,950 would engage the January-to-March downtrend line at $9,010.
Support can be spotted between the early to mid-February lows at $8,817 to $8,787 with further minor support being seen at the 8 March low at $8,714.
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