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Gold and WTI continue to move in opposite directions

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Nick Goold

New York Gold

Despite failing to break $1,800 again last week, positive price action has continued, with the 10-day moving average providing technical support and the market continuing to move higher. The forecast for a modest increase in United States policy rates is a positive factor for Gold prices.

This week could be very volatile, as several scheduled economic indicator releases could change market conditions. The most important economic indicator this week will be United States consumer price index for November on Tuesday. The market hopes the inflation rate will continue to show weak results and push Gold above $1800. Conversely, if inflation is high, prices could fall below $1,750.

Central banks in the United States, England, and Europe should raise their policy rates by 0.50% this week. The interest rate increase will likely match the forecast, but volatility will increase around the time of the announcement. While the uptrend in Gold should continue, this week's economic indicator releases could change market conditions quickly. If the market were to break below the 10-day moving average, it could become a good selling opportunity in the short term.

Gold Dec 12

Resistance: 1800, 1806, 1810, 1850

Support: 1785, 1765, 1745, 1737, 1730, 1700

WTI

Last week was very bearish for WTI. Prices declined every day ending last week significantly below $75 support. Europe announced a cap on the price level of Russian oil imports, which was bearish for WTI.

Technically crude oil is over-sold, so it would be risky to sell at this point as there is a gap from the 10-day moving average. However, the downtrend is so strong that it would be best to wait for the market to approach the 10-day moving average before selling.

WTI Dec 12

Resistance: 75.00, 77.75, 80.00, 84.00, 90.00

Support: 70.00, 67.00, 62.30

Great