WTI rallies while gold holds and aluminium slips
Outlook on WTI crude oil, gold and aluminium amid Turkish earthquake woes.
WTI crude oil recovers on supply concerns
WTI crude oil is seen bouncing off Monday’s low at $72.50 per barrel for a second day in a row on supply concerns following the temporary precautionary shut down until the end of the week of the Turkish Ceyhan oil terminal, which can export up to a million barrels of crude per day, after a major earthquake befell the region and on optimism regarding China’s demand.
Over the weekend International Energy Agency (IEA) executive director, Fatih Birol, said that China’s economic recovery could be stronger than expected which should boost demand for oil by the world’s largest importer.
It should also be noted that the European ban on seaborne imports and price caps for Russian oil products came into effect on Sunday. The 55-day simple moving average (SMA) at $77.59 is now in focus, together with the mid-January low and 3 February high at $78.16 to $78.45 which may offer resistance. If overcome, however, a rise back towards the upper end of the December-to-February sideways trading band around the $83.00 mark may once again ensue.
Good support can now be spotted between the January and current February lows at $72.64 to $72.50, with further support sitting at the $70.25 December trough.
Gold hovers above its one-month low at $1,862
Last Thursday’s rise in the price of gold to a new nine-month high at $1,959 per troy ounce was swiftly followed by a bearish engulfing day on the candlestick chart on Friday amid much stronger than expected US employment data which pointed to more Federal Reserve (Fed) rate hikes and pushed the implied fed funds and bank rates up by about 10 basis points.
The gold price on Friday thus dropped to a one-month low at $1,862, above which it has been hovering in very low volatility since. This level is likely to soon give way, though with the 55-day SMA at $1,843 then being eyed. Further down sits the $1,833 to $1,825 support area which contains the mid-to-late December highs and the early January low.
Resistance lies at the $1,897 to $1,900 mid-to-late January lows.
Aluminium trades at near one-month low
Aluminium’s 5% slide from last week’s high on the back of a stronger US dollar has taken the metal to a near one-month low, close to the 55- and 200-day SMAs at $2,478 to $2,476 per metric ton which may offer support this week.
Good resistance can be spotted between the mid- and late January lows at $2,555 and more significant resistance between the January and last week’s highs at $2,648 to $2,678.
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