Gold prices fell back dramatically during their most recently completed intraday trading session, giving back even early morning gains posted at the day’s opening. Crude oil markets, in contrast, experienced volatile price swings driven by rising geopolitical risk across the Middle East.
Gold started the week trading with strong momentum but wasn’t able to hold its bullish trend. After climbing sharply higher the price of gold quickly reversed into losses after finding hard resistance at the 50-day Exponential Moving Average (EMA50). The EMA50 then became a dynamic resistance, preventing most of the subsequent gold rally attempts to break higher.
Crude oil prices started the week off with a hefty rally that pushed values above that all-important ceiling of $75.00. This upward momentum proved unsustainable. Crude oil shot up, giving back much of their advance.
Traders then quickly took profits after crude oil’s initial surge. This quick buy-the-news profit-taking forced a historic tumble in prices. Market participants were shell shocked, which by itself led to the kind of extreme volatility we saw in crude oil trading. Today, geopolitical tensions in the Middle East are erupting. This development is doing to worsen the recent market volatility and add to the uncertainty.
This failure of gold to hold onto its gains is illustrative of the challenges gold has had in penetrating through resistance levels. The EMA50's role as a dynamic barrier underscores the technical factors influencing gold's price movements.
The crude oil narrative is more complicated, as its very volatile performance captures the tugging contrasts of forces inside the market at play today. This geopolitical instability, along with profit taking and a wary trader psyche is making things a highly dynamic, compound negative threat to crude oil prices, and unpredictable at that.
