Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Oil Surprises With Rally, Gold Dips

By MarketPulse (Jeffrey Halley)CommoditiesJul 22, 2021 04:42AM ET
Oil Surprises With Rally, Gold Dips
By MarketPulse (Jeffrey Halley)   |  Jul 22, 2021 04:42AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Oil staged a surprise rally

Official US crude inventories followed the API data from the day before and posted a surprise increase in stocks. However, instead of prices falling, oil rallied aggressively. Brent crude leapt 5.25% to USD 72.225 a barrel, and WTI rocketed 5.80% higher to USD 70.25 a barrel. Some long covering sees both contracts ease by 30 cents a barrel in another dull Asian session.

I must admit that the rally caught me completely flat-footed, especially its scale. Notably, there were no surprises within the distillate or gasoline indexes to support the jump in prices either. I can only surmise that with risk sentiment climbing in New York anyway elsewhere, that some good old-fashioned FOMO fast-money drove the rally. Asian physical buyers who had been holding out for deeper bargains may also have needed to scramble in yesterday's session.

Having said that, I have previously stated that I believed that any material sell-off would be short in duration. I didn’t realise it would be that material and that short in duration!

Unless we get another massive wave of Delta-variant risk-off sentiment sweeping markets, the lows seen by oil this week are likely to be the lows seen for some time. The world remains on a recovery track, albeit asymmetrically, supporting oil’s consumption fundamentals for the rest of 2022.

Brent crude should find plenty of willing buyers now on any dips to USD 70.00 and USD 68.00 a barrel. Similarly, any retreat by WTI below USD 68.00 a barrel should find plenty of support. The upside remains less clear in the short-term, with resistance now at USD 74.00 and USD 72.00 a barrel, respectively.

Gold continues to fade

A rise in US long-dated bond yields weighed on gold prices yesterday, as did a reduction in risk sentiment, with the Delta fears of Monday continuing to ebb in North America overnight. Gold fell 0.40% to USD 1803.50 an ounce in a nondescript session and has edged lower to USD 1799.00 an ounce in Asia.

With Asian stock markets performing strongly, it seems clear that regional investors are quickly rotating out of defensive gold positions and back into equities. That is weighing on gold prices, even if it is not yet enough to flip gold into a temporary bear market.

The yellow metal has taken a back seat this week, with volatility far higher in other asset classes. In the bigger picture, gold remains confined to a broader trading range bound by its 100 and 200-DMAs at USD 1790.00 and USD 1824.00 an ounce, respectively. A daily close above or below either of those levels is required to signal gold’s next directional move.

Original Post

Oil Surprises With Rally, Gold Dips

Related Articles

Phil Flynn
Energy Report: Build Back Big Oil Better By Phil Flynn - Jul 30, 2021

It must be frustrating for the Biden administration that all of the policies that they put in place to try to reduce America's dependence on oil and gas are helping build back Big...

Oil Surprises With Rally, Gold Dips

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Rahul Yadav
Rahul Yadav Jul 22, 2021 5:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
when gold up???
Linda Mary
Linda Mary Jul 22, 2021 5:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email