Oil drops on Saudi price cuts, gold and silver prices also under pressure
Outlook on Brent crude oil, gold and silver as Saudi Arabia reduces February official selling price for Asia.
Brent crude oil takes hit on Saudi price cuts
Oil - Brent Crude fell by over 3% on Monday as Saudi Arabia announced a reduction in the February official selling price (OSP) of its primary Arab Light crude oil for Asia by $2 to $1.50 a barrel above the benchmark, its lowest level in 27 months. It did so amid increasing global supply, especially from non-OPEC producers, and dwindling demand.
The front month futures contract held above last week’s 74.81 low, though. Were it to give way, the 7 December low at 73.69 would likely represent the next downside target ahead of the 72.50 December low.
Resistance can now be spotted around Friday’s 77.60 low ahead of the October-to-January downtrend line at 79.22 and last week’s 79.35 high.
Gold price continues to slide
Spot Gold’s drop from its $2,088 per troy ounce late December high amid an appreciating US dollar has so far taken it to Monday’s $2,017 low from where it is trying to recover. Slightly further down support can be found along the 55-day simple moving average (SMA) at $2,014 and, more significantly, between the October and late November highs at $2,009 to $2,007.
Resistance above the breached October-to-January uptrend line, now because of inverse polarity a resistance line, at $2,038 can be spotted at Friday’s $2,064 high. While remaining below it, downside pressure should retain the upper hand.
Silver price hovers above support
Spot Silver (5000oz)’s descent from its late December per troy ounce high at $24.60 on the back of an appreciating US dollar took it to last week’s $22.84 low, above which it has been hovering since. Slightly below it remains the $22.51 December low which should act as support, were it to be retested. Further down sits the November low at $21.89.
Minor resistance above Tuesday’s $23.37 intraday high can be seen between Friday’s high and the 55- and 200-day simple moving averages (SMA) at $23.51 to $23.66. While this resistance area caps, downside pressure should continue to dominate.
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