#Gold and #WTI Crude Oil Forecast (26 MAY 2022)

 

Gold Forecast: Markets Have Tough Wednesday

The one thing that you should do is keep an eye on your position size as it will almost certainly cause problems.

Gold markets fell rather hard Wednesday as we continue to see a lot of trouble dear the 200-day EMA. Ultimately, this is a market that has been selling off quite drastically, and at this point, it looks as if we are trying to find buyers underneath. This is a market that is going to be influenced by a lot of external problems.

For example, the interest rate markets in America will have a huge influence on what happens, and if interest rates continue to rise significantly, that is going to put downward pressure on gold. Alternately, if the interest rates in America start to sell off, then it is likely that gold will rally. Nonetheless, there are a lot of different things to pay attention to when it comes down to the gold market right now.

The technical analysis is most certainly worth paying attention to as well, as it looks like we have tried to rally quite significantly over the last week or so. However, this pullback does make sense as you would not anticipate that the market was suddenly going to take off to the upside. This has been a nice move higher, but at this point, it’s likely that we would see some type of pullback to look for more buyers.

It’s worth noting that the bond markets are starting to pick up a little bit, driving yields down. If we can continue to see that happen, then the gold market gets a bid. On the other hand, if we see the bond markets continue to attract buyers, that will drive down the price of gold as the yield for holding paper will be much more worthwhile.

There is a lot of risk out there right now, so there is a certain amount of demand for gold based upon that alone. Nonetheless, I think you should expect a significant amount of volatility, especially if we are going to see a potential trend change. Because of this, the one thing that you should do is keep an eye on your position size as it will almost certainly cause problems. It’s worth noting that the $1870 level has offered resistance of the last 48 hours, so if we break above there, then we could go higher.

WTI Crude Oil Forecast: Grinding Away

We are in a strong uptrend, and that should continue to be the case, but that does not necessarily mean that we have a lot in the way of momentum.

The West Intermediate Crude Oil market did very little on Wednesday as we continue to see the market shows very little in the way of momentum. I think this is going to continue to be a major issue, as the oil markets are essentially doing nothing. Oil has to worry about multiple issues at the same time, but it’s worth noting that the OVX has shown that there is almost no real momentum in one direction or the other, so it means that we are more likely than not going to see oil remain relatively steady.

At this point, I would pay special attention to the 50-day EMA, which is sitting at the $105 level. It’s also rising, so that doesn’t suggest the buyers will continue to be aggressive. You should also keep in mind that the demand for crude oil is going to continue to be a question that markets will pay close attention to, due to the fact that there is the possibility of a lack of demand as the global economy is struggling. On the other hand, there are a lot of concerns when it comes to the inflation situation, so it’s possible that oil will continue to be a way to play the trade. There are also concerns when it comes to supply as well.

Just above, the $115 level is a barrier that if we can break above, it’s likely that we would go looking to the $125 level after that. Short-term pullbacks will continue to offer value that a lot of people will take advantage of. In fact, it’s not until we break down below the $100 level that I think you would see a structural change. At that point, we would probably see a drop to the 200-day EMA down at the $90 level.

We are in a strong uptrend, and that should continue to be the case, but that does not necessarily mean that we have a lot in the way of momentum. Because of this, you need to be very patient with any positions that you have, but given enough time looks like the buyers will continue to show interest, so you have to go with where the big money seems to be willing to jump in.

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