Technical Outlook for Bullion and WTI Crude Oil

Technical Outlook for Bullion and WTI Crude Oil

Technical Outlook for Bullion and WTI Crude Oil

$GLD, $USO

Gold Bullion

Spot Gold traded at the lower end of its weekly range Friday, closing the day down at 1,252.48 oz. The precious Yellow metal entered a selling spiral last Wednesday, on heightened speculation that the US Fed will pull the trigger on a rate hike as soon as next June, plunging by nearly 20 immediately after the release of the Fed mins.

The bright shiny metal has been trading within a descendant channel ever since topping at 1,303 for the year early May, and has tested the base of the range last Thursday.

On a daily basis, the technical picture favors a continued decline, given that the price extended below a now flat 20-Day SMA, whist the technical indicators present modest Bearish slopes within negative territory, as the price was unable to break below the weekly low of 1243.76 Friday.

In the 4 hours; the price develops below all of its MA’s, with the 20-Day SMA heading sharply lower and about to break below the 200-Day SMA after already clearing the 100-Day SMA Wednesday, while the technical indicators consolidate near oversold readings, in line with the longer term outlook.

Support marks: 1,243.80 1,235.00 1,223.90
Resistance marks:1,258.90 1,265.40 1,274.40

WTI Crude Oil

Crude Oil prices retreated Friday, but closed the week with gains, and not far from 50 bbl, as investors book in profits ahead of the weekend.

WTI Crude Oil futures closed the week at 47.65 after the Baker Hughes (NYSE:BHI) report showed that the number of oil rigs drilling in the US remained unchanged from the previous week at 318.

Prices rallied in spite of growing Crude Oil inventories, as hopes for increasing demand alongside with disruptions in supply, point for a soon end to the worldwide glut that dominated the market for over a year.

There seems to be growing chances of a Southward corrective movement after Crude Oil flirted with the major psych mark, and the daily chart supports.

So, given that the technical indicators are retreating from near overbought levels, although the Southside seems capped by a Bullish 20-Day SMA, currently at 45.90.

In the 4 hours; the price is now developing below a horizontal 20-Day SMA, while the technical indicators have moved into negative territory, but so far remain flat, lacking enough downward momentum to suggest a strong slide ahead.

Commentary

Crude Oil and refined products inventories are up, but having little impact on prices, the the normal relationship between inventories and prices may soon reassert itself and we will see prices falling down to test the 26 bbl lows.

Support marks: 47.50 46.70 46.20
Resistance marks: 48.60 49.20 50.00

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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