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Gold to Retreat, Oil Eyes OPEC Meet

Published 27/01/2023, 06:47
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Gold

Gold prices are on track to post losses this week, mainly for two reasons. Firstly, this week, we have seen strong US economic data, which indicates that the US economy is faring much better than many anticipated. Secondly, we have also seen some life coming back for the dollar index, which is off its lows.

Although, traders do believe that the current weakness in the gold price is very much temporary as the Fed is more than likely to slow down the pace of the interest rate hike. In addition, technical analysis shows that the shinning metal's price is trading above the 50, 100, and 200-day SMA on the daily time frame, which shows that bulls are in complete control of the price action. The 50-day SMA also trades above the 100-day SMA, which is another sign of confidence that the current trend could pick up more steam. 

Oil

Brent and Crude oil prices are trading pretty much where they started the week. The critical thing to note here is that the price is off its lows of the week, and the focus now is on one crucial factor, the OPEC meeting taking place next week. It is anticipated that the cartel will not change its supply next week, but rumors have already started to flow, giving mixed signals.

On the technical side, there is no doubt that both Crude and Brent Oil prices are moving away from there over the oversold region. The RSI is approaching the oversold area, so we may see some buyers returning. Crude oil price is flirting with the 100-day SMA on the daily time frame, and if the price breaks above this level, we are likely to see more bulls coming to the market. 

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