Gold and oil drop on hopes of eastern European peace talks and demand concerns
Gold and Brent crude oil have given back a chunk of their recent gains as investors hope for a de-escalation in Ukraine amid Chinese lockdowns which are depressing demand.
Gold rejected by the $1,959 to $1,974 resistance zone
Yesterday gold failed in its significant $1,959 to $1,974 resistance area on hopes of a positive outcome in the peace talks between Russia and Ukraine, which are to resume in Istanbul today.
The $1,959 to $1,974 resistance zone is made up of the September and November 2020, January 2021, and February 2022 highs and as such proved difficult to overcome.
A drop towards the 22 March low at $1,911 is underway, a slip through which would put the early March low and the 61.8% Fibonacci retracement of the February-to-March advance at $1,895 to $1,890 on the map.
Resistance can be found at the 17 March high at $1,949 and also at last week’s high at $1,966. Only if a daily chart close above the $1,974 level were to be made, would the psychological $2,000 mark be back in the spotlight.
Brent drops on Chinese fuel demand concerns
Brent crude oil topped out at last week’s $120.48 high and fell sharply yesterday as increased lockdowns in China to combat a surge in Covid cases leads to demand concerns.
Furthermore, renewed peace talks between Ukraine and Russia, with the former offering a ‘neutral status', raise hopes of an easing of sanctions against Russian energy.
The oil price dropped by over 6% yesterday and nears the 9 March low at $104.25, a fall through which should take it to the psychological $100 mark and the December-to-March uptrend line at $99.60.
Minor resistance lies between the 23 and 25 March lows at $111.61 to $112.35 with further resistance sitting at yesterday’s high at $114.99.
Only if last week’s high at $120.48 were to be exceeded, would the early March high at $131.51 be back in the picture.
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