Brent price rises for a fifth day as gold stalls and aluminium drops
The outlook on Brent crude oil and gold remains bullish and that of aluminium bearish.
Gold price rise stalls after five-day rally
Gold’s recovery from last week’s low at $1,787 has taken it to this week’s high at $1,869 in a straight five-day rally, taking its cue from a stabilising US dollar, with the precious metal stalling ahead of today’s Federal Open Market Committee (FOMC) meeting.
Minor support can be found at the $1,851 early May low and along the 200-day simple moving average (SMA) at $1,839 as well as at the 17 May high at $1,836.
Slightly above this week’s high lies the April low at $1,873, above which the early May high and 55-day SMA can be found at $1,909 to $1,913.
Support below the 200-day SMA and the 17 May high at $1,839 to $1,836 can be spotted along the breached two-month downtrend line at $1,815.
Brent crude oil rises for fifth consecutive day on tight supply
Brent crude oil’s advance for the fifth consecutive day is taking place amid the prospect of even tighter global supply and expectations of stronger demand driving the oil price up.
This comes on the back of the new French foreign minister, Catherine Colonna, saying on Tuesday that she was optimistic that resistance by some member states opposed to the new European Union (EU) sanctions package that would phase out Russian oil imports to Europe would soon wane, tightening oil supplies even further.
The $113.59 to $114.30 resistance zone, which consists of the April-to-May peaks, thus remains in focus, a rise and daily chart close above which would lead to the late March high at $120.48 being targeted as well.
The current bullish bias will remain in play as long as yesterday’s low at $109.56 underpins. Below it the 55-day SMA and one-month support line can be seen at $107.68 to $106.90.
Aluminium slipping back towards its early May low as energy crunch bites
Aluminium’s rejection by the 200-day SMA at $2,971 early this week provoked a sharp sell-off as Europe’s aluminium output slides due to the energy crisis with China picking up the slack.
Europe’s main aluminium smelters are continuing to curtail production in the face of soaring energy costs which has led to cheaper imports from China rising significantly.
The 19 May low at $2,824 is currently being toyed with, a fall through and daily chart close below which would push the early May low at $2,698 back to the fore.
Resistance can be spotted along the March-to-May resistance line at $2,954, the 200-day SMA at $2,971 and this week’s high at $2,994. Whilst the latter level caps, the past couple of months’ downtrend remains intact.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to volatility on commodity markets
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
See opportunity on a commodity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a commodity?
Don’t miss your chance. Upgrade to a live account to take advantage.
- Analyse and deal seamlessly on fast, intuitive charts
- Get spreads from just 0.3 points on Spot Gold
- See and react to breaking news in-platform
See opportunity on a commodity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
