Commodities
Oil Technicals Our view of the oil market played out last week, with front month Brent crude rallying at one stage to the US$61.00/b level, where it met with solid resistance. The ensuing decline, which took the price back below US$59.50/b, indicates that the downtrend channel for Brent is very much in place. We expect further losses towards the US$56.00/b level.
As you know, we are still generally bullish oil, or at worst feel that prices will stay high due to the ongoing strength of global demand and numerous geopolitical risks. As such, a bounce beyond the short-term towards recent highs cannot be ruled out. That said, strong resistance now exists in the US$61.00-US$62.00 region.
The gold price really disappointed. In fairness, it did make it to a high of US$480.00/oz - our upside target of a few weeks ago - at one point last week, before selling off hard. The poor end-of-week price action suggests further short-term weakness, with a break of US$465.00/oz heralding losses to support at US$459.00/oz. Medium term, though, the uptrend is still in place, and we remain optimistic that the price will trend higher over the coming months.
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