Brent price rises for a fifth day as gold stalls and aluminium drops
The outlook on Brent crude oil and gold remains bullish and that of aluminium bearish.
Gold price rise stalls after five-day rally
Gold’s recovery from last week’s low at $1,787 has taken it to this week’s high at $1,869 in a straight five-day rally, taking its cue from a stabilising US dollar, with the precious metal stalling ahead of today’s Federal Open Market Committee (FOMC) meeting.
Minor support can be found at the $1,851 early May low and along the 200-day simple moving average (SMA) at $1,839 as well as at the 17 May high at $1,836.
Slightly above this week’s high lies the April low at $1,873, above which the early May high and 55-day SMA can be found at $1,909 to $1,913.
Support below the 200-day SMA and the 17 May high at $1,839 to $1,836 can be spotted along the breached two-month downtrend line at $1,815.
Brent crude oil rises for fifth consecutive day on tight supply
Brent crude oil’s advance for the fifth consecutive day is taking place amid the prospect of even tighter global supply and expectations of stronger demand driving the oil price up.
This comes on the back of the new French foreign minister, Catherine Colonna, saying on Tuesday that she was optimistic that resistance by some member states opposed to the new European Union (EU) sanctions package that would phase out Russian oil imports to Europe would soon wane, tightening oil supplies even further.
The $113.59 to $114.30 resistance zone, which consists of the April-to-May peaks, thus remains in focus, a rise and daily chart close above which would lead to the late March high at $120.48 being targeted as well.
The current bullish bias will remain in play as long as yesterday’s low at $109.56 underpins. Below it the 55-day SMA and one-month support line can be seen at $107.68 to $106.90.
Aluminium slipping back towards its early May low as energy crunch bites
Aluminium’s rejection by the 200-day SMA at $2,971 early this week provoked a sharp sell-off as Europe’s aluminium output slides due to the energy crisis with China picking up the slack.
Europe’s main aluminium smelters are continuing to curtail production in the face of soaring energy costs which has led to cheaper imports from China rising significantly.
The 19 May low at $2,824 is currently being toyed with, a fall through and daily chart close below which would push the early May low at $2,698 back to the fore.
Resistance can be spotted along the March-to-May resistance line at $2,954, the 200-day SMA at $2,971 and this week’s high at $2,994. Whilst the latter level caps, the past couple of months’ downtrend remains intact.
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