Crude oil on track for fourth straight day of falling prices as gold, silver come off their peaks
The oil price remains under pressure as FOMC minutes show that members are concerned with sticky inflation, leading to demand worries in the world’s top consumer. Gold and silver prices drop from lofty heights on profit taking.
WTI drops on demand concerns
The WTI crude oil front month futures price is seen slipping for the fourth straight day as the latest Federal Reserve minutes showed members’ willingness to tighten policy further if inflation remains sticky, potentially hurting energy demand in the world’s top oil consumer. EIA data also showed that US crude inventories increased by 1.825 million barrels last week, versus an expected 2.55 million barrel decline.
The early and mid-May lows at 76.75 to 76.43 are within reach, a fall through which could lead to the 75.77 late February low being reached next.
From a technical perspective, downside pressure should remain in play while no bullish reversal takes the oil price above Monday’s 80.11 high.
Gold price slips to uptrend line
The spot gold price is on track for its third day of falling prices, having come off Monday’s $2,450 per troy ounce record high. The February-to-May uptrend line at $2,365 has been revisited and held which means that the 10 May high at $2,360 may be revisited.
A fall and daily chart close below the uptrend line would have more significant negative connotations, though, and put the $2,300 zone back on the map.
Since negative divergence can be spotted on the daily candlestick chart with the Relative Strength Index (RSI), the possibility of another medium-term top being formed is very real.
Silver price comes off 11 ¼ year high
The spot silver price’s rally to $32.51 per troy ounce, a level last seen in December 2012, has been followed by some profit taking which took it through the steep accelerated uptrend line to Thursday’s low at $30.16. Below this level support can be found at the $29.79 April high, a fall through which would have more negative connotations.
Minor resistance can now be spotted at Tuesday’s $31.08 low.
Were Monday’s 11 ¼ year high at $32.51 to be exceeded, the November 2012 high at $34.40 would be next in line, followed by the October 2012 peak at $35.39.
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