Gold is just $65 away from its $3k milestone, Crude oil bulls return

Donald Trump unleashed another round of Tariffs on Sunday night, this time adding 25% to steel imports and 10% to aluminium. And the latter is more significant than it may initially seem, given the US imports over half of its aluminium from overseas. Australian PM Albanese is due to hold a call with President Trump today and efforts are already underway to make exemptions on tariffs of Australia’s exports, like achieved during Trump’s first presidency.

Gold reached it latest record high, and key commodities were higher in general while they absorbed the latest round of inflation-inducing measures of the Trump administration. Volatility was capped across FX pairs ahead of Jerome Powell’s testimony and CPI report later this week, while US indices recouped some of Friday’s losses yet remain in a choppy range it has been in over the past two weeks.

Gold futures (GC) technical analysis

Gold futures rose 1.6% to their latest record high, which puts it on a good standing to notch up its seventh bullish week in a row. The daily chart shows a strong bullish trend which seems averse to any meaningful pullback greater than a day. Monday’s range expansion candle broke prices out of compression and closed the day comfortably above 2910. While the daily RSI (14) is oversold, there is no evidence of a bearish divergence yet. Now just $65 below the $3,000, the milestone level could be reached this week if its current trajectory is maintained.

The 1-hour chart shows a small consolidation around the weekly S1 pivot, just beneath Monday’s high. Much of the initial rally was seen on lower volumes during the Asian session, but it has been validated by heavier trading volumes around the highs of the day. From here, dips towards 2920 or 2900 (if it is allowed to even dip that far) could attract bulls who are clearly eyeing a move up to the big $3,000 level. $2950 and $2970 make suitable intraday targets over the near term.

WTI crude oil futures (CL) technical analysis

Despite the trade war heating up on Monday, crude oil prices defied the headlines to post its second consecutive bullish day – its first such sequence since mid-January. It appears to be a technically-driven move of mean reversion around key support levels, and the lack of rising volumes could suggest this bounce to be corrective and that further lows cannot yet be ruled out.

The daily chart shows support was found perfectly at its 200-day SMA and the 50% retracement level of the January high to the 2024 low. Prices also failed to hold beneath the November high before rising 1.8% on Monday, which is its best day since the actual January high was formed. Yet daily trading volumes were the lowest of the year, and until we see volumes rise with prices we are to assume this is a corrective move.

The 1-hour chart shows an impulsive move from the 50% level, with no immediate threat of it topping out. Perhaps prices are vying for a move to $74, where the monthly pivot point (74.14) and weekly R1 pivot (73.97) surround. If prices reach this tight resistance zone, we can reassess its potential to top out.

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-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

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