Brent crude oil slips while gold and silver stabilise
Outlook on Brent crude oil, gold and silver as RBA unexpectedly hikes rates to 4.10%, the highest since 2012.
Brent crude oil is rejected by resistance
Since last Wednesday, the Brent crude oil price rallied by over 8% on rumours that OPEC+ was going to cut its output. These were confirmed at this weekend’s OPEC+ meeting when Saudi Arabia announced voluntary, additional output cuts of 1 million barrels per day starting in July 2023. The cut provoked a price gap rally to $78.17 on Monday morning. Since Russia continues to flood China with cheap oil and doesn’t adhere to its output quota and because of global recession fears, Monday’s gap was quickly filled on the daily candlestick chart with the breached April-to-June downtrend line acting as support at $76.07. If slid through on a daily chart closing basis, the 25 May low at $75.08 would be next in line and probably the 22 May low at $74.47 as well. The fact that Monday’s bearish reversal occurred marginally below the late May high at £78.52 indicates that once more the oil price has stalled within this resistance zone and is thus more prone to slide again than to break higher.
Gold between rock and a hard place
Last week’s slide in the price of gold halted at the November-to-May uptrend line at $1,940 per troy ounce as the US dollar rally stalled. While the $1,940 to $1,933 support zone holds, a recovery towards last week’s high at $1,983 may ensue. Last week’s $1,933 low is part of this support zone. En route lies the two-month downtrend line at $1,974 which may cap on Tuesday. The break out of the recent $1,983 to $1,933 sideways trading range is likely to determine the ensuing medium-term trend.
Silver volatility is diminishing in sideways trading range
The silver price remains below its two-month downtrend line at $23.78 which needs to be overcome for last week’s high at $24.02 to be reached. While $24.02 caps, a retest of Monday’s low at $23.25 may unfold, a fall through which would target the March-to-June uptrend line at $23.04. If it were to be slipped through, the May low at $22.68 and the 200-day simple moving average (SMA) at $22.17 would be back in sight.
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