Brent crude oil rises on China demand optimism but gold, silver prices remain under pressure
Outlook on Brent crude oil, gold and silver as the People’s Bank of China slashes its one-year loan prime rate to a record low of 3.45%.
Brent crude oil price rise on China demand optimism
The price of Brent crude oil is on track for its third day of gains on hopes that Chinese authorities would introduce more policy measures to boost economic growth. The People’s Bank of China’s (PBOC) easing of its monetary policy on its 1-year loan prime rate to a record low of 3.45% has been interpreted by traders as a step in the right direction with the oil price heading back up towards its early August high at $85.93.
Further up sits the 4 August high at $86.55 ahead of the current August peak at $87.83. While the early August and last week’s lows at $82.81 to $82.31 underpin, the medium-term uptrend in Brent crude oil remains intact.
Gold price continues to slide
The one-month decline in the price of gold is ongoing with the mid-March low at $1,886 about to be reached. Further down beckons the March $1,872 to $1,870 price gap. The one-month resistance line at $1,894 caps any attempt of a bounce for now, above which linger the minor psychological $1,900 mark and the 200-day simple moving average (SMA) at $1,908. While the precious metal price remains below it, overall downside pressure should remain in play.
Silver still range trades above its $22.12 June low
Silver’s decline from its $25.26 per troy ounce two-month high has taken it to a seven-week low at $22.23, to marginally above the $22.12 June low, last week. The precious metal remains within its downtrend channel and below last week’s $23.01 high.
While it and the next higher 200-day simple moving average (SMA) at $23.30 cap on a daily chart closing basis, the medium-term downtrend retains the upper hand. Only a drop through the June and current August lows at $22.23 to $22.12 would most likely result in a fall towards the psychological $20.00 region taking place.
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