Gold, Copper and Crude Oil Up on OPEC Talk

Gold, Copper and Crude Oil Up on OPEC Talk

Gold, Copper and Crude Oil Up on OPEC Talk

$GLD, $CU, $USO, $OIL

Gold getting up off the floor, following Copper North, as OPEC rhetoric keeps the Crude Oil Bounce Up

Crude Oil

Crude oil continued to rally overnight, after being hammered last week. I see it a case of hope and not a turn from negative to positive sentiment. The price action overnight was driven by more production cut extension comments by various Tier 2 NOPEC’s.

Both Brent Crude and WTI Crude Oil rallied by 1% initially before giving up 50% those gains later in the session for a 0.5% gainer overall.

The Baker Hughes (NYSE:BHI) Rig Count data out Friday will give The Street a reality check with another rise in active rigs, mostly in shale oil drilling.

The reality is that OPEC/NOPEC have no choice but to extend the production cut deal just to maintain the present status quo Vs the increase in non-traditional production and returning members, Libya and Nigeria.

Brent Crude spot opened at 50.50 today with resistance at 50.90 and then its 200-Day MA at 51.20. Support lies intra-day at 49.80 and then 49.00.

WTI Crude Oil spot opened at 47.70 with 1st resistance at 48.10 and then its 200-Day MA and a 2X daily top at 49.00. The mark is strong resistance. Intra-day support sits at 47.20 and then 45.85.

Gold

After a week of negative price action, Gold Bulls came alive to rally from 1219 to 1228 before settling at 1225 in early Asia. The pullback in US stocks has played its part, as has the risk aversion as the political “Noise” increased in the United States. Gold has followed Copper’s overnight rally too.

Gold is now flirting with its 100-Day MA which is just above at 1225.50. A daily close above that mark is a constructive technical development.

Today’s US CPI numbers will be a Key determinant of how Gold finishes the week with a high print most likely taking the wind out of Gold’s sails as The Street is pricing the the odds of a Fed hike higher for June’s meeting.

Expect Asia to buy Gold price dips ahead of the weekend.

Gold is resistance at 1230 and 1240, with Key support being at 1214.50. A move through the lower level suggesting that a further dip to 1200 could be seen.

Copper

Copper rose nearly 2.50% overnight to 2.5375, before falling back to open around 2.4950 in early Asia trading, it is up about 1%. The rally was driven by declining LME stocks and a tightening of the Shanghai forward delivery curve. However with the PBOC declining to add liquidity in Friday’s open market operations, will have Copper giving back much of its gains.

Copper’s price action has been constructive this week marking out a series of higher lows each day and holding above its 200-Day MA at 2.4425, and 1st support lies at 2.4575, just ahead of the critical 200-Day MA. The overnight high at 2.5375 is 1st resistance and a close above the mark suggests Copper could attempt a rally to its 100-Day MA at 2.6115.

Have a terrific weekend

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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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