Oil Pushing the Highs
Oil prices rebounded again on Monday, the second day in a row that they’ve reversed sizeable early losses to end the day in positive territory. They’re now on a good run, and China’s modest growth target did not deter traders for long.
Against that backdrop, it may well be the case that Brent and WTI are about to test the upper end of their trading ranges that they’ve remained within since early December. A break above $89 would be a very bullish signal for Brent, while the same would be true of $83 in WTI. Whether they have the momentum to pull that off may well depend on Powell’s dual testimonies and Friday’s jobs data.
Gold Tentatively Higher
Gold is edging tentatively higher ahead of Powell’s testimony, during which conditions could become much more volatile. The yellow metal has run into resistance around $1,860 this week, which was always likely to be the first test to the upside. Above here, $1,890-$1,900 will be a big test, should it get that far.
Of course, all of this may depend on what Powell says. A hawkish testimony could wipe out any bullish momentum built up over the last week, at which point attention will shift back to the lows around $1,780-$1,800.