Oil heads higher, gold under pressure

NEW YORK (May 19) Oil prices are rebounding again today alongside a slight uptick in market sentiment more broadly. Perhaps some of the confidence in Washington that a deal on the debt ceiling isn’t far away, amid “steady progress”, is filtering through to the markets, although default was almost certainly never a realistic possibility in the first place.

Crude has gathered a little upward momentum over the last week or so, with prices making higher lows on the way which could be a bullish signal short term. Brent has continued to see resistance around $77-$78 though but a break of this, taking it back into December to March territory, would be encouraging, with $80 then being the next big test.

Gold heading for a deeper correction?

Gold prices fell again on Thursday but are seeing some support today around a very interesting support level. The yellow metal has been under pressure amid rising US yields and a stronger dollar and now it’s pulled back to $1,960, a big support zone in the second half of March and throughout April, as well as a big resistance point in early February.

A significant break below here could be a very bearish signal in the near term, potentially signalling a much deeper correction is on the cards in the coming weeks. Another level of interest is $1,940, with a break of this further confirming that the tide has turned, with the focus then shifting back towards $1,900.

MarketPulse