Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Commodities Week Ahead: Gold Awaits Inflation Data, Oil On OPEC Watch

By Investing.com (Barani Krishnan/Investing.com)CommoditiesJul 12, 2021 09:15
uk.investing.com/analysis/commodities-week-ahead-gold-awaits-inflation-data-oil-on-opec-watch-200486004
Commodities Week Ahead: Gold Awaits Inflation Data, Oil On OPEC Watch
By Investing.com (Barani Krishnan/Investing.com)   |  Jul 12, 2021 09:15
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

A raft of inflation data and a host of speeches by Federal Reserve officials, along with the dollar’s reaction to those, will determine if gold gets to progress more deeply into $1,800 territory this week or even stay there.

Gold Daily
Gold Daily

For oil, the outcome will again be decided by weekly US consumption data. Another sizable crude draw, with complementing gasoline numbers, reported by the Energy Information Administration can keep prices chugging at around $75 highs.

Gold Daily
Gold Daily

Otherwise, fears of dysfunction within OPEC—after its failure last week to agree on new output levels for August, resulting in a fight between one-time allies Saudi Arabia and UAE—can continue chipping away at oil’s three-month old rally. The spread of the Delta variant of COVID-19 and low levels of vaccination in some countries could also weigh on crude prices.

Gold was trading about half percent down in Monday’s afternoon session in Asia.

The yellow metal posted a third straight weekly gain on Friday, returning to crucial $1,800 support. But it struggled to hold that ground on Monday. Gold’s outlook was also muddy, with no certainty on how long it will take for the much-touted US inflation to accelerate its gains.

Inflation-Skewed Week

In what appears to be a week skewed to inflation, readings for the US Consumer Price Index, Producer Price Index and the University of Michigan’s Consumer Confidence will be issued on Tuesday, Wednesday and Friday, respectively.

In terms of other data, aside from the staple weekly jobless claims, there will also be Industrial Production and NY Fed Manufacturing.

Haresh Menghani, who blogs on gold technicals, said in a post on ForexLive:

“Dips below the $1,800 mark might continue to find some support near the $1,795-93 horizontal support, which should act as a key pivotal point for intraday traders. A convincing break below might prompt some technical selling and accelerate the slide further towards the $1,780-78 support zone. Some follow-through selling below the $1,775 level will negate any near-term positive bias and turn the commodity vulnerable.”

“On the flip side, the $1,815-18 region now seems to have emerged as immediate resistance. This is followed by the very important 200-day Simple Moving Average, around the $1,828-29 zone. A sustained strength beyond will be seen as a fresh trigger for bullish traders and set the stage for an extension of the recent positive momentum witnessed over the past three weeks or so. (That could) surpass an intermediate barrier around the $1,852-55 region and test the next major hurdle near the $1,870 level.”

Chair Powell To Lead Fed Speakers

On the Fed side, Chairman Jerome Powell's semi-annual congressional testimony on Wednesday and Thursday will play a key role in determining the next leg of a directional move for the dollar.

The dollar was up on Monday morning in Asia. Risk currencies remained above their recent lows against both the US currency and the yen as investor fears of a slowdown in the global economic recovery from COVID-19 calmed down for now.

Other Fed speakers this week will be New York’s John Williams, Minneapolis’ Neel Kashkari, Atlanta’s Raphael Bostic, Boston’s Eric Rosengren and Chicago’s Charles Evans.

On the oil front, US crude’s WTI, or West Texas Intermediate, benchmark traded below $74.40 a barrel. London’s Brent crude hovered at under $75.40.

Oil: OPEC Watch Continues

WTI ended last week with a modest 0.6% drop while Brent lost 0.8% on the back of OPEC concerns.

TD Securities said in a note:

“A material rally or decline is unlikely until the market hears details on how the OPEC+ group settles the request from the UAE to increase its production base. If the producer group limits monthly supply increases to the previously discussed 400,000 barrels per day per month through December, we project that WTI may well challenge $80 per barrel some time during Q3-2021, despite COVID-19 Delta variant risks.”

An end to Iranian sanctions may or may not have a material negative impact on oil, depending on OPEC’s reaction, TD Securities said, adding: “If no OPEC+ plus deal is made and all members produce to capacity, there will be a very large surplus and prices may see very sharp declines.”

Finance ministers from the Group of 20 countries, meanwhile, said at their meeting on Saturday that Delta outbreaks could force new restrictions on society and business.

That, in turn, casts a shadow over the fuel demand outlook outside the United States, especially Asia and Australia.

Disclaimer: Barani Krishnan uses a range of views outside his own to bring diversity to his analysis of any market. For neutrality, he sometimes presents contrarian views and market variables. He does not hold a position in the commodities and securities he writes about.

Commodities Week Ahead: Gold Awaits Inflation Data, Oil On OPEC Watch
 

Related Articles

Andy Hecht
Cameco Stock Rebounds Along With Uranium By Andy Hecht - Sep 28, 2021

This article was written exclusively for Investing.com.Uranium is an energy commodity with lots of applications The price moved higher over the past weeks Cameco rebounded with the...

Commodities Week Ahead: Gold Awaits Inflation Data, Oil On OPEC Watch

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with 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
  • 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.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. 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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
or
Sign up with Email