Weekly Data: Oil and Gold: Price Review for the Week Ahead

The most important economic data for this week are:

Thursday:

• US quarterly GDP growth rate on Thursday at 12:30pm GMT. Market participants are expecting the figure to come out at 3.2%, down from 4.9% in the previous quarter. This data might have already been priced in as it’s for the previous quarter, though any significant change might spark volatility in the majority of the pairs traded against the dollar.

Friday: 

• US core PCE price index for February is expected to decrease to 0.3% against the previous 0.4%. If these figures are broadly accurate, then it might create some pressure for the dollar. However, in the event of a higher PCE reading, the dollar might experience a minor boost. 

Sunday: 

• NBS manufacturing PMI at 1:30am GMT, where the expectations are for a slight increase, reaching 49.9 points. The NBS is larger than the Caixin (to be released next week) and is focusing more on larger state-owned firms. If the expectations are correct, then it would mean that the state-owned firms might be performing slightly better but have yet to reach the 50-point level. This indicates that the manufacturing sector of the NBS survey might still be shrinking and probably might have some effect on production-related instruments such as oil, natural gas, silver, etc. 

USOIL, daily

 

 

 

 

 

 

 

 

Oil prices remained steady as investors assessed the impact of Russian refinery disruptions and a slightly weaker US dollar. Recent Ukrainian attacks on Russian refineries and production cuts in Russia have created mixed effects on crude prices, with potential implications for global oil exports. Geopolitical tensions in the Middle East have contributed to rising geopolitical premiums, further impacting oil prices.

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On the technical side, the price is trading in a somewhat steady bullish trend and has currently reacted on the support area of the 50% of the weekly Fibonacci retracement level. The 50-day moving average is trading well above the 100-day moving average, validating the overall bullish momentum in the market for crude oil. Also, the Stochastic oscillator is trading near the extreme overbought levels, hinting that a correction to the downside might be seen in the coming sessions. This correction might happen after a retest of the previous high of around the $82.50 price area, and then possibly retest the support of $80.50 once again.

Overall, as long as the price does not break below the bullish trendline (blue line), the outlook for the short term will also be bullish.

Gold-dollar, daily

 

 

 

 

 

 

 

 

Gold prices rose due to a weaker dollar and anticipation of US inflation data, with expectations of new record highs by the end of the year. Traders are pricing in a 64% probability of the Fed cutting rates in June, according to the FedWatch Tool, with strong support for gold prices from Chinese household demand and central bank purchases. Also, if we look at the commitment of traders report, we will see that the number of commercial traders is still declining, hinting that the price of gold might decline in the near short term.

From a technical point of view, the price has found sufficient support on the 20-day moving average and has since corrected to the upside. On the other hand, the all-time high of mid-March, in combination with the upper band of the Bollinger bands, is a strong resistance to the price, which could potentially push the price down in the coming sessions. If this scenario plays out, then the first area of possible support might be found around $2,150, which is the psychological support of the round number, the 23.6% of the daily Fibonacci retracement level, as well as the area of price reaction in mid-March.

This article was submitted by Antreas Themistokleous, an Exness analyst.

 

Disclaimer: The opinions in this article are personal to the writer and do not reflect those of Exness or LeapRate.