Brent crude oil drops by over 5%, gold range trades and copper tries to find support amid recession fears.
Outlook on Brent crude oil, gold and copper amid resurfacing recession fears
Brent crude oil drops by over 5% in two days
Oil - Brent Crude oil’s descent accelerated as global recession fears and renewed concerns about the banking sector weighed on risky assets.
Brent crude oil not only slid by over 5% in the past couple of days but also closed its March-to-April price gap while testing its January low at $77.65 despite falling US inventories. According to Tradingeconomics “the latest EIA report showed US crude inventories dropped 5.054 million barrels last week, far exceeding expectations of a 1.486 million barrel decline.”
The December trough at $75.32 represents the next downside target, below which there isn’t much support to speak of ahead of the $70.09 March low.
While the psychological $80 region caps, further downside is expected to be witnessed.
Gold continues to flirt with the psychological $2,000 mark
Spot Gold continues to sideways trade below its one-year $2,048 per troy ounce mid-April high and does so around the psychological $2,000 mark while being stuck in a range between $2,012 and $1,970 since last week, the break out of which is likely to determine the ensuing trend.
A rise and daily chart close above the $2,012 level would engage the 5 April high at $2,032 and probably also the $2,048 peak and above whereas a fall and daily chart close below the $1,970 level should lead to the February high at $1,959 ahead of the $1,950 to $1,935 support zone, the late March and early April lows, being revisited.
Immediate resistance remains to be found between the $2,003 to $2,009 late March and Wednesday’s high.
Copper tries to find support around its March low
The price of Copper has dropped by over 6% on recession fears but is trying to stabilise around its $8,443 per ton low after six consecutive days of losses.
Should it not succeed in doing so, the 200-day simple moving average (SMA) at $8,306 may be reached next. Further down sits the January trough at $8,189.
Were a bounce to be seen, the early April low at $8,666 is likely to act as initial resistance.
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