Gold price stuck fast above support while oil slips lower

The latest set of Federal Reserve (Fed) minutes has done little to help gold, which has been under pressure and unable to push higher as the Fed outlines its plans to keep tightening policy.

If the Fed does achieve its aim, then inflation’s rise will be limited, and as a result gold’s appeal could be dented quite significantly. Much of the bull case for gold has rested on the assumption that prices will keep rising at a fast pace, and if expectations of the speed of the rise are trimmed then gold may well continue to struggle.

Meanwhile oil prices have been unable to steady themselves, as fears about a slowing pace of economic growth revive. This comes both from the Fed’s plan to tighten policy, and the rise in the oil price itself.

Before oil saw huge gains due to the war in Ukraine, it had already been steadily rising thanks to expectations of strong demand. Now that is changing, and the release of oil stockpiles from various nations will also boost available supply, putting pressure on prices.

Gold hovers above support

Gold prices continue to hover above the $1910 support zone, displaying a reluctance to move higher and also an unwillingness to drop back.

The latest set of Fed minutes has boosted the US dollar and yields, limiting gold’s upside for the time being. Buyers will need to see the price push on above $1950 for a more bullish view to emerge. This will then bring $1965 and higher into view.

Alternately, sellers will want to push the price below the support zone around $1910, in order to clear the way for a deeper retracement that may see $1875 tested.

WTI stumbles below 50-day MA

Oil prices have dropped below the 50-day simple moving average (SMA) for the first time this year, but are attempting to stabilise at $97 for the time being.

However, buyers have yet to see much price action that points to a sustained rebound. The first hurdle to clear would be $105, as a move above here would recoup the losses of the last two days. This would then bring $115 into view, and beyond this $125 could become a medium-term target.

Sellers will aim to drive the price below the mid-March low at $93, which might then allow for a dip towards $90 and the 100-day SMA (currently $97.61).