Gold price surges, as WTI price hesitates in key week
Gold starts to rebound after retracement into Fibonacci support, while WTI consolidates ahead of the June contract end.
Gold turning higher after decline into support
Gold price declines seen over recent days always looked like a retracement given the rally through the $1713 swing high last Thursday.
With that in mind, the Fibonacci support levels were of particular interest as potential sources of a bullish surge. That looks to finally be happening, with the decline taking us into a confluence of trendline and 76.4% Fibonacci support. With the price of gold turning higher this morning, it is likely we are seeing the beginning of the next move higher for gold. A break below $1682 would be required to negate this bullish outlook.
WTI continues to consolidate in key week
WTI failed to really react yesterday after Saudi Arabia announced both that they are cutting more than expected, and could cut further after the June Organization of the Petroleum Exporting Countries (OPEC) meeting. That inability to respond is the inverse situation from that seen on the way up, where negative news was ignored and positives taken onboard.
The consolidation we are seeing here, therefore, looks like a top, with a break below the $23.84 paving the way for a period of downside. With the June WTI contract ending next Monday, all eyes will be on that front month contract as we look to see if oversupply and a lack of storage options will help avoid another foray into negative territory. Whether that happens or not, market fears of such a move could see the June contract decline in the lead up to the deadline, driving a widening contango for the short term. However, for now we are in consolidation mode, with a break through $23.84 or $27.39 required to provide a clear directional bias.
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