Crude oil aiming at 2018 high, Gold might be at risk after a positive NAFTA deal
- The US, Canada and Mexico have reached a last-minute NAFTA negotiation.
- Crude oil price is aiming at 2018 high, currently resides well above 75.50
- Gold future does not look brightening as rising bonds might result in a decline in term of appeal
Crude oil breaking above, Gold is at risk
The Monday’s market (1st Oct 2018) saw a pretty move from the key commodities as the green line comes back for gas as well, and the oil is aiming at 2018 high. Looking past, the eleventh-hour NAFTA negotiation deal between US, Canada and Mexico ought to dominate the talking points. However, the new framework, renamed as the USMCA or US, Mexico, Canada agreement concludes a year tentative-talks. The officials described the lead as the “Playbook for future trade deals”. However, the US mid-election in November might influence the implementation of the deal.
Still, the US-led global trade war has filled the market spirit understandably and the scope to weight on gold as bond is raising. This particular fact could cause a greater decline in appeal for the bonds and it in turn could result in a gold price drop as well. Meanwhile, crude oil and Brent oil seems to be well-supported and further gains are likely to happen, as they are currently residing just below 76-region and above 85-region respectively.
Gold Technical Analysis
The new resistance for gold price is likely to center between 1189.76 and 1194.30. A downward move of gold appears to be on the verge, as bond price raising to weigh on gold seems to oppose the gold rally and a break below 1180 is likely to happen. Market has also seen multiple breakthrough attempt of gold broken below 1210.15 region. The next downside barrier might reside in between 1160.38-11.70.42 area. A break below 1160.20 would open up the opportunity to break below 1122.81, the December 2016-low.
Gold price chart (September 2017- September 2018)
Crude oil technical analysis
Crude oil daily price chart (February 2018- October 2018)
Crude oil critical resistance lies in between the 75.45 and 77.31 region. A break above 77.20 region would increase the prospect of breaking above 80. Further gain of crude oil and Brent, should be on the horizon.
To the bottom lines
Right now, seems to be the ideal moment for oil to rally further and future gold trade should include a cautious move, although the US economic data is poor, GBP is closing in on a positive Brexit deal, Cloud over the Italian politics started to clean up, and the follow through might lead to a break below 93.50 for USD in a recent future.
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Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]