Oil in Choppy Waters, Gold Under Pressure
2023.02.28 06:11
Choppy trade ahead?
Oil prices remain very choppy, with gains today largely offsetting losses at the start of the week. We may have to wait for more hard-hitting economic data next week before we see the upper or lower ranges tested. The uncertainty appears to be preventing a serious move in either direction.
Should the January data prove to be a blip, it could put pressure on the upper end of the range as longer-term economic prospects improve. Meanwhile, another month of hot data could necessitate much higher rates and threaten a soft-landing, weighing on demand prospects. In the interim, choppy trading looks likely to persist.
Testing major support
Gold is edging lower again this morning, moving ever closer to a very interesting area of support between $1,780 and $1,800. There is a lot of technical support around here from the 50 fib – November lows to February highs – to the 200-day simple moving average. It was also previously a major rotation level and with momentum slipping on approach this time, it could prove to be the case again.
Ultimately, the data may determine how firm a support zone it will be but either way, how it reacts to this level could give a strong indication of sentiment in the markets at this time.
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