Gold, copper stall at multi-month highs while WTI slips on hawkish Fed comments
Outlook on gold, WTI and copper ahead of Fed Chair's speech.
Gold stalls in eight-month highs
The price of gold has risen to eight-month highs and on Monday briefly overcame its $1,877 per troy ounce June peak but didn’t quite manage to reach the March 2022 lows at $1,891 to $1,896 before stalling ahead of US Federal Reserve (Fed) Chair Jeremy Powell’s speech which is likely to set the tone ahead of Thursday's US inflation reading.
Were the November-to-January advance to continue and the $1,877 to $1,881 resistance area to be exceeded, the late April 2022 high at $1,919 may be reached next. The whole $1,877 to $1,919 area may act as strong resistance, though.
Minor support remains to be seen at the 4 January high at $1,865 with more significant support seen along the November to January uptrend line at $1,839. While above it, the medium-term uptrend remains in play.
WTI slips on rate hike concerns
The bounce in WTI over the last few days seems to have been short-lived with the oil price easing back to last week’s low at $72.64 on rate hike concerns following comments from Fed officials about needing to push US rates above 5% and then hold them.
While Monday’s high at $76.89 isn’t bettered, downside bias prevails with the November low at $73.67 being in the pipeline. Further down sits the December trough at $70.25.
Above Monday’s $76.89 high meanders the 55-day simple moving average (SMA) at $80.27 and sits significant resistance between the December-to-January highs at $81.18 to $83.30. While it caps, the medium-term downtrend remains valid.
Copper loses upside momentum at eight-month highs
Copper’s over 7% rise in three consecutive days to six-month highs at $8,869 per tonne as demand prospects brightened after China reopened its borders probably has further to run with the May 2022 low at $8,939 being targeted.
Short-term the recent advance may lose upside momentum, though. This is due to hawkish comments by the Fed ahead of Thursday’s highly anticipated US inflation data. However, good support between the November and December highs at $8,629 to $8,593 is likely to hold up the industrial metal’s price.
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