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Commodities push higher on weaker USD but are still range-bound

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Nick Goold

Gold

Gold prices ended the week marginally higher, having held vital support at $1,900 earlier in the week. Lower than-expected US employment data weakened the USD, which helped prices close back above the 10-day moving average.

Many long-term bullish Gold traders still hope a weaker US economy will stem the recent rises in US official rates. However, Federal Reserve officials are still planning on two more rate increases by the end of the year. The USDJPY has broken its recent uptrend, and the GBPUSD rose significantly higher Friday, both positive for Gold prices.

This week sees the release of the most critical US inflation indicators (CPI and PPI) along with US Retail sales, which could finally see Gold break out of its recent $1,900 to $1,935 range. At the moment, Gold looks more likely to push higher, but range trading remains the best strategy in the short term as the fundamental picture does not have a clear trend higher or lower.

Gold Chart July 10

Resistance: 1938, 1984, 2000, 2032, 2050, 2080

Support: 1900, 1889, 1870, 1830

WTI

Recent supply cuts from Saudi Arabia and Russia started to translate into higher prices last week, pushing WTI higher. While the recovery from $67.00 support has been encouraging, prices are still in a range.

The significant fall of the USD index following the weaker-than-expected US employment figures saw WTI prices close on the weekly high, and the 10-day moving average is now pointing higher. WTI prices have been stuck in a range for two months now, and upward momentum is increasing, so rather than selling at resistance, looking to buy dips ahead of $75.00 looks to be the best strategy for short-term and medium-term traders.

WTI Daily Chart July 10

Resistance: 75.00, 79.00, 82.50

Support: 67.00, 65.00, 64.00, 62.00

Great