Gold and aluminium prices slip as Brent holds gains

​Gold slides towards the 200-day simple moving average

Gold’s descent from its mid-April high at $1,998 is ongoing amid demand woes with the December-to-May uptrend line and 200-day simple moving average (SMA) at $1,838 to $1,835 being within reach.

In this vicinity the gold price is likely to stabilise, at least in the short-term. Should this not be the case, a drop towards the next lower late December-to-January lows at $1,790 to $1,781 may ensue. Further down sits the December trough at $1,754.

While the one-month downtrend line at $1,902 and, more importantly, the late April high at $1,919, cap, the recent downtrend remains firmly entrenched.

Further up meanders the 55-day SMA at $1,932.

Brent crude oil nears downtrend line on strong fuel demand

The price of Brent crude oil continues to be underpinned by robust global demand which outweighs fears of demand slowdown in top importer China.

Record fuel exports from the US are draining local supplies amid higher global demand for oil as supply remains diminished on shunning of Russian cargoes. This pushed the price of Brent crude oil to $109.89 last week, a level which will be back in the picture once the two-month downtrend line at $108.70 has been exceeded. En route lies the 21 April high at $109.45.

If the $109.45 to $109.89 resistance zone were to be bettered, the mid-April high at $114.00 would be back in sight. Above this level good resistance can be spotted at the 3, 10 and 24 March highs at $116.48 to $120.48.

Slips should find support along the 55-day SMA at $105.66 and at yesterday’s low at $102.91.

Further down sits last week’s low at $99.28.

Aluminium nears February low amid Chinese demand concerns

Aluminium’s over 25% decline from its $4,077 early March peak is approaching the February low, 200-day SMA and mid-January low at $2,964 to $2,938 per tonne where it may pause.

Should thisn not be the case, the December high at $2,851 will come into view, together with the early January low at $2,778. Minor resistance can be seen at the 26 and 28 April lows at $3,011 to $3,039. Immediate downside pressure should be maintained while the price of aluminium remains below the 28 April high at $3,133.

Above it the two-month downtrend line can be found at $3,167 and key resistance between the October peak, mid-March and mid-April lows at $3,222 to $3,229.

The over 25% fall in the price of the metal used in car manufacturing, construction and packaging, from its $4,077 early March peak must be seen in the context of a price rise of around 175% from the May 2020 low to this year’s high.