Oct 16, 2022
VOT Research Desk
Market Analytics and Considerations
Crude Oil: After the most recent readings for U.S. retail sales and consumer price inflation revealed that the Fed was barely winning in its year-long battle against price pressures, crude prices fell as much as 7% on the week, reversing roughly half of the gains of the previous two weeks.
The global growth outlook remains a major downside risk, also.” He cited the recent lockdowns in China, the world’s largest crude oil importer, which has been fighting COVID flare-ups following a week-long holiday.
With labor markets remaining tight and inflation stubborn, further downgrades may be on the cards.
After closing Friday’s official session at $85.61, the price of New York-traded West Texas Intermediate crude dropped $3.50, or 3.9%, to $85.55.WTI was down just over 7% for the week. After a decrease of 12.5% in September and a loss of 24% for the third quarter, the benchmark U.S. crude price experienced a strong start to October, rising 17% over the two prior weeks.
After finishing Friday’s session lower by $2.94, or 3.1%, at $91.63, Brent oil, which is traded in London, finished at $91.64.Brent had increased 13% in the previous two weeks. In September, the global crude benchmark fell 11%, and in the third quarter, it fell 22%
.
Crude Oil: Price Outlook So, technically speaking, where are crude prices in the United States headed?
Despite the previous week’s strong rebound, WTI fell short of the weekly middle Bollinger Band of $96 due to selling pressure at $93.64.
if WTI has any plans to continue grinding higher above $96, short term support $81 must be respected, failing which 100 week SMA $78 can be revisited.
We could see a correction toward $82.60 if selling continues below the daily middle Bollinger Band, which is $84.75
Gold: Settlements and Activity in the Market The USD is stealing every safe haven’s shine, so gold, the original precious metal, has very little luster.
December’s gold benchmark futures contract settled at $1,648.90 an ounce, down $28.10, or 1.7 percent, from a session low of $1,646.15.It lost 3.5 percent for the week, or just over $60
.
After falling to $1,640.71 at midday, the spot price of bullion, which is followed by some traders more closely than the futures price, was at $1,645.24 at 14:00 ET (18:00 GMT).
According to data from Investing.com, gold’s weekly decline was the metal’s worst since a drop of nearly 4% in the first week of August.
Before the sector’s bulls had a chance, gold broke below key support at $1,650 on Thursday. The yellow metal was able to recoup nearly all of its losses on the day thanks to the dollar’s fall in response to speculation of peak inflation in the United States.
However, on Friday, as the Dollar Index rose for the seventh time in eight days, gold selling resumed .A session high of 113.30 was reached by the index, which compares the dollar to the euro, yen, pound, Canadian dollar, Swedish krona, and Swiss franc. Analysts predicted that the Dollar Index would very likely reach a high of 120 on technical charts.
Meanwhile, bond yields compared to the 10-year Treasury note shot up to a 14-year high of 4.06 percent.
The Fed’s campaign against inflation has primarily benefited the dollar and yields, as the central bank increased interest rates by 300 basis points this year and anticipates adding another 125 before the end of the year
Gold Price Outlook:In other words, there are more people selling gold than buying it because of the seven-month bearish streak. Few people love gold enough to buy it. Another way to look at it is that this kind of one-sided bearish trade mostly happens when markets are net long.
Monthly action on spot gold shows that the metal may continue to fall to $1,630-$1,615.A further decline to $1,600-$1,585 is possible if this support zone fails. The much-hyped $1,560 (50 percent Fibonacci retracement of $1046 -$2073) can be tested at some point
Bearish sentiments are likely to haunt gold as long as it remains below the minor resistance zone of $1665-1685, with a bigger rejection point of $1,730-1,735 remaining a significant obstacle.
