Oil continues higher despite setbacks this week
Could we finally be about to see a breakout in oil prices after two months of consolidation? The rally over the last week or so from the range lows has been quite strong and backed by momentum – as well as fresh cuts from Saudi Arabia and Russia – and despite being pushed back from the recent highs over the last couple of days, it’s continued to drive higher in a way that could see the upper boundary buckle.
Yesterday’s ADP number appeared to wipe out any momentum that had built up but a rally late in the day saw it end the session in the green and come within a whisker of 21 June peak. A failure to overcome that could further confirm the continuation of the gradual consolidation we’ve seen over the last couple of months, whereas a break above could be a very bullish signal.
Can gold hold onto $1,900 after the US jobs report?
Gold came under pressure in the aftermath of yesterday’s ADP report but managed to hold above $1,900 and even recoup some of its losses. It’s trading marginally higher today but whether it will be able to hold onto those gains, and remain above $1,900, will probably depend on what kind of jobs report we get.
Can it cling on if we get another red-hot report? Another strong report is looking increasingly likely on the back of yesterday’s ADP number, although as we’ve seen in the past it isn’t always that reliable a barometer. A cooler report could propel it higher given expectations have now undoubtedly risen. It’s still almost 8% from its highs and a cooler report could offer the opportunity for a corrective move which we’ve barely seen so far.