Crude oil prices fell on Thursday, giving up a decent chunk of profits from Wednesday because of blockage at Suez Canal increased worries about international supply distribution. It is estimated that roughly 2 million barrels of crude oil are being withheld daily the container ship stays stuck on the sandbank. The decline in WTI over the past 24 hours thus likely reflected more prominent, wider fundamental themes.
Components of Europe, such as France and Italy, have reintroduced lockdowns to tackle rising Covid cases. This has raised concerns regarding the demand for energy prices. The haven-linked US Dollar has been increasing amid some stock market volatility. The exact same is also accurate for gold.
Weakening longer-term Treasury prices are acting as a cushion for XAU/USD, provided that the yellowish metal is a non-yielding advantage. This probably explains the metal has seen fairly quiet trading conditions because Treasury rates fell and the US Dollar strengthened. Bearing that in mind, what are a few dangers that crude oil and gold prices confront going to the weekend?
All eyes turn to US personal income data, in which spending is anticipated to shrink 0.8percent in February amid severe cold weather that knocked out power across parts of Texas. A gentle core PCE reading, the Fed's preferred gauge of inflation, could also cool the bond market further. That may offer breathing distance for gold and crude oil if the US Dollar losses some ground over the next 24 hours.
Crude oil prices remain at risk in the near-term since WTI has managed to confirm a break under rising assistance from November. On the other hand, the product hasn't managed to breach the crucial 57.42 -- 59.07 support zone I emphasized last week. Prices will also be merging round the 50-day Easy Moving Average
GOLD TECHNICAL ANALYSIS
Gold prices continue to trade inside a bullish Falling Wedge graph pattern. The ceiling of this wedge seems to be directing XAU/USD cautiously lower. This could precede a retest of this crucial 1678 -- 1658 support zone. Otherwise, a push over the wedge displays the 50-day SMA as well as the 1747 -- 1764 inflection range.
