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Crude Oil Prices Up Despite Catastrophic US Labor Data Expectations

Crude Oil and Gold Talking Points:

  • Crude oil prices were higher as risk appetite revived
  • Investors hope reopening economies will see higher energy demand
  • Gold prices remain well supported, however

Crude oil prices rose on Friday despite the approach of official US labor market data which are expected to show more than 20 million jobs lost last month thanks to coronavirus-induced economic shuttering.

Investors are reportedly prepared to look past even this ghastly prospect and anticipate further reductions in lockdown measures around the world.

France, parts of the United States and other countries are already considering or implementing a cautious rollback, with Australia set to join them.

These hopes have been enough to put another week of gains on the table for energy prices. Output cuts agreed last month have kicked in during May, but demand has been decimated and storage tanks remain fully. The existing glut of petroleum and refined product now in storage will need be worked through to end users and this may well cap prices despite recent gains.

Oil – US Crude BEARISH

Data provided by

of clients are net long. of clients are net short.

Change inLongsShortsOI
Daily4%-15%-5%
Weekly7%-16%-3%

Gold prices were broadly steady through Friday’s Asian session. Risk appetite was generally quite upbeat, with rises seen for most major equity markets some of which, like Japan’s had seen long holidays this week.

This market like all others is eyeing those US employment numbers and the firmness of prices suggests that the underlying haven bid is still very strong.

Gold BULLISH

Data provided by

of clients are net long. of clients are net short.

Change inLongsShortsOI
Daily-6%11%-1%
Weekly3%9%5%

Crude Oil Prices Technical Analysis

US Crude Oil Prices, Daily Chart

The daily chart uptrend prevailing since April 21continues to hold sway, with prices currently right in the middle of their upward channel. The last three days have seen little progress, however, and if that trend continues a test of the lower boundary will look more likely than an upside breakout. That base comes in at $20.65. Bulls probably need to retake and secure psychological resistance at $30 to make further rises stick, but there seems little chance of their doing that at least until those US payrolls numbers are out.

Gold Prices Technical Analysis

US Gold Prices, Daily Chart

Gold’s stubborn range trade continues. Prices have flirted with a break below their latest uptrend line, but the move lacked conviction and the upper range limit of $1729.19 looks likely to be tested once again, possibly very soon. Given the market’s propensity to stick within the range, any upside break will probably be greeted with extreme caution by investors until they can gauge how likely it is to stick.

There’s little to suggest that a major downside test is imminent, although the fundamentals are driving this market and any major better-than-expected economic data could force the issue.

Commodity Trading Resources

— Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!