Crude Oil Prices May Bounce But Gains Unlikely To Prove Lasting

Crude oil prices attempted a tepid recovery Thursday following the prior session’s brutal sell-off but renewed risk aversion derailed the advance, with the WTI benchmark tracking Wall Street lower to close within a hair of two-month lows. Gold prices edged up as the risk-off mood weighed on bond yields but meaningful follow-through failed to materialize as the US Dollar reclaimed support from haven-seeking flows, as the prior session’s brutal sell-off.

GOLD MAY FALL AS OIL GAINS AMID RISK RECOVERY

Looking ahead, a rebound in futures tracking the bellwether S&P 500 index hints that a rebound in risk appetite may be in the cards. Gold prices may turn lower as yields rise against this backdrop, sapping the appeal of non-interest-bearing assets. Crude oil might manage a recovery in the meanwhile. The absence of a resolution on any of investors’ marquee worries is likely to make any such move short-lived however.

GOLD TECHNICAL ANALYSIS

Gold prices remain stuck below resistance in the 1235.24-41.64 area. A daily close above that exposes the 1260.80-66.44 region. Alternatively, a turn below resistance-turned-support in the 1211.05-14.30 zone opens the door for a retest of the September 28 low at 1180.86.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are digesting losses after sliding through support set from early February. Sellers now target the 64.26-45 area, with a break below that targeting April’s swing low at 61.84. Alternatively, a bounce back above former support – now in the 66.84-68.71 area – opens the door for a retest of the 70.05-26 region. Recent losses are poised to make good on longer-term topping cues but confirmation is still pending.