Gold is just $65 away from its $3k milestone, Crude oil bulls return

Donald Trump unleashed another round of Tariffs on Sunday night, this time adding 25% to steel imports and 10% to aluminium. And the latter is more significant than it may initially seem, given the US imports over half of its aluminium from overseas. Australian PM Albanese is due to hold a call with President Trump today and efforts are already underway to make exemptions on tariffs of Australia’s exports, like achieved during Trump’s first presidency.

Gold reached it latest record high, and key commodities were higher in general while they absorbed the latest round of inflation-inducing measures of the Trump administration. Volatility was capped across FX pairs ahead of Jerome Powell’s testimony and CPI report later this week, while US indices recouped some of Friday’s losses yet remain in a choppy range it has been in over the past two weeks.

Gold futures (GC) technical analysis

Gold futures rose 1.6% to their latest record high, which puts it on a good standing to notch up its seventh bullish week in a row. The daily chart shows a strong bullish trend which seems averse to any meaningful pullback greater than a day. Monday’s range expansion candle broke prices out of compression and closed the day comfortably above 2910. While the daily RSI (14) is oversold, there is no evidence of a bearish divergence yet. Now just $65 below the $3,000, the milestone level could be reached this week if its current trajectory is maintained.

The 1-hour chart shows a small consolidation around the weekly S1 pivot, just beneath Monday’s high. Much of the initial rally was seen on lower volumes during the Asian session, but it has been validated by heavier trading volumes around the highs of the day. From here, dips towards 2920 or 2900 (if it is allowed to even dip that far) could attract bulls who are clearly eyeing a move up to the big $3,000 level. $2950 and $2970 make suitable intraday targets over the near term.

WTI crude oil futures (CL) technical analysis

Despite the trade war heating up on Monday, crude oil prices defied the headlines to post its second consecutive bullish day – its first such sequence since mid-January. It appears to be a technically-driven move of mean reversion around key support levels, and the lack of rising volumes could suggest this bounce to be corrective and that further lows cannot yet be ruled out.

The daily chart shows support was found perfectly at its 200-day SMA and the 50% retracement level of the January high to the 2024 low. Prices also failed to hold beneath the November high before rising 1.8% on Monday, which is its best day since the actual January high was formed. Yet daily trading volumes were the lowest of the year, and until we see volumes rise with prices we are to assume this is a corrective move.

The 1-hour chart shows an impulsive move from the 50% level, with no immediate threat of it topping out. Perhaps prices are vying for a move to $74, where the monthly pivot point (74.14) and weekly R1 pivot (73.97) surround. If prices reach this tight resistance zone, we can reassess its potential to top out.

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the market you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.