Oil Grinds Higher, Gold Shows Volatility
Oil has ground higher over the past week. Brent and WTI remain confined within their one-month trading ranges, although near the top ends.
Hurricane related concerns in the US have shuttered production there. This has likely played the major part in energy commodities recent rally.
Doubts over future consumption demand, however, continue to cap oils rally. With Covid-19 returning in force to Europe and parts of Asia, those fears are well-founded.
A lack of follow-on US fiscal stimulus and the virus have torpedoed US airlines plans for mass air travel. Brent crude was down 0.50% to USD45.80 a barrel overnight.
Its continued upward progress is capped by its 200-day moving average (DMA), which today lies at USD45.75 a barrel. Brent crude needs to move through its 200-DMA and its 5th August highs at USD46.20 a barrel. This should relight the fire in oil bulls.
WTI crept 0.20% higher to USD43.45 a barrel overnight. Hurricane-related weather in Texas and Florida shutters oil production and refining capacity.
WTI is at the top of its one-month range. Moreover, it is well clear of its 200-DMA below at USD41.60 a barrel. At this stage, it likely has a greater potential to spike higher than Brent.
Commodity news reports oil markets are steady in Asia. Ahead of Powell’s speech, the street also watches the progress of the US hurricanes. The severity of the hurricane landfall in Texas is going to be a potent short-term driver of oil prices.
Gold’s Volatile Consolidation Continues
In precious metals, Gold had another USD50 an ounce range day overnight. It finished the session 1.35% higher at USD1954.00 an ounce.
Gold’s volatile consolidation of the past week between USD1900.00 and USD1960.00 an ounce looks set to be completed. Chairman Powell’s Jackson Hole address is sure to have gold breaking one way or the other.
Gold has edged USD10 an ounce lower in Asia to USD1944.00 an ounce. Traders book short-term profits from the strong move higher overnight.
With that, gold should find plenty of willing buyers on dips to USD1935.00 an ounce. That is ahead of the Jackson Hole address.
A break of v1970.00 an ounce is likely setting up a short-term test of USD2000.00 an ounce.
Meanwhile, Gold and silver prices are trading near steady in early U.S. trading Thursday. It paused after solid gains, ahead of some key U.S. economic data.
