Brent crude oil and gold slide while copper rallies on rising risk-on sentiment
Outlook on Brent crude oil, gold and copper amid improving sentiment.
Brent crude oil remains under pressure
Brent crude oil’s April descent took it to a near one-month low at $77.36 last week as investors grapple with the prospect of further rate hikes, lingering recession fears and uncertain demand from top importer China.
Brent crude oil’s recovery rally from last Friday petered out at $80.49 and whilst it and the one-month downtrend line at $80.16 cap, renewed downside is expected to be witnessed.
Were the January low and the late April low at $77.65 to $77.36 to be slipped through, the December trough at $75.32 would be eyed. Further down lies the $70.09 March low.
While Friday’s high at $80.49 caps, further downside is expected to be seen. Above it meanders the 55-day simple moving average (SMA) $81.25.
Gold slips towards the lower end of its sideways trading range
Gold continues to range trade below its one-year $2,048 per troy ounce April peak and does so around the psychological $2,000 mark while being stuck in a sideways trading range between $2,012 and $1,970 since mid-April, the break out of which is likely to determine the ensuing trend.
JPMorgan’s US government-backed takeover of First Republic Bank over the weekend has led to risk-on sentiment which pushed the gold price lower.
A fall and daily chart close below the $1,970 mid-April low would target the February high at $1,959, ahead of the $1,950 to $1,935 support zone, made up of the late March and early April lows.
Immediate resistance above the minor psychological $2,000 mark continues to be seen between the $2,006 to $2,009 mid-to late April highs.
Only a currently unexpected rise and daily chart close above the $2,012 level would engage the 5 April high at $2,032 and probably also the $2,048 peak.
Copper bounces off its March and April lows
The price of copper gapped higher on Monday morning, having previously bounced off its March and April $8,443 to $8,428 per ton lows, as risk-on sentiment rises.
Monday’s minor price gap at $8,650 to $8,639 might nonetheless be filled before further upside takes the industrial metal back towards its 55-day simple moving average (SMA) at $8,873.
Only a currently unexpected drop through the $8,428 April trough would engage the 200-day SMA at $8,322. Further down sits the January trough at $8,189.
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