One notable laggard in the commodity rally was oil overnight, with both Brent crude and WTI testing range highs again before retreating.
The first signs that India’s Covid-19 tragedy is easing is likely to see bullish fast money pile back into long positioning in force.
Brent crude fell 0.40% to USD68.25 overnight, reversing those losses by rising to USD68.50 a barrel this morning, with post-holiday Asian buyers showing their hand modestly.
It remains comfortably mid-range in its multi0week upward channel, bordered by USD62.50 and USD67.00 a barrel.
Gold clearly has some surprises left in it as it chose yesterday to play catchup to the commodity rally, after decent us data and dovish Fed comments push the US dollar and yields lower.
In the process, gold has completed a directional breakout by rising and closing above formidable resistance at USD1800.00 an ounce, its 100-day moving average , which now becomes support.
It is clear that plenty of technical traders and algorithmic models bought gold on the break of USD1800.00 an ounce.
At this stage, only bond markets suddenly deciding tonight that 1 million-plus jobs added, along with US GDP forecast to rise over 7.0% this year, are inconsistent with 10-year yields at 1.50%, threatens the gold rally.
Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors.