Gold and Crude Oil Monthly Forecast: March 2024

Gold Monthly Forecast: March 2024

Rebounding from support at $2000. Central bank rate cuts could boost appeal, making gold a bullish 'buy on dips' market.

• Gold markets have seen a little bit of negative momentum during the month of February but has also bounced rather significantly from a major support level, and I think that might be the theme going forward.
• While I am bullish of gold, I also recognize that it could be very noisy on the way up.

Looking at the gold market, I can see that there is an obvious support region that starts out at the $2000 level and drops down to the $1980 level. The $1980 level is also backed up by the 50-Week EMA, which is an indicator that a lot of longer-term traders will pay attention to. That being said, the market is very noisy, and I think that we have a situation where eventually buyers will continue to come back into the market and pick up “cheap gold.”

Central banks around the world are likely to cut interest rates this year, and I do think that given enough time gold will react to this. After all, as interest rates start to drop, it makes holding gold a little bit more palatable for the “big boys” out there in the financial world. Remember, many of them actually have to pay some type of storage fee, as they hold physical gold.

Speaking of central banks, they are net buyers of gold and therefore it does make quite a bit of sense that there is a certain amount of support underneath for it as the central banks around the world are by far some of the biggest entities in the financial markets. Beyond that, we had a massive hammer that formed in the middle of the month on the weekly chart that shows just how important that support level underneath is. Furthermore, there are plenty of trouble spots around the world to keep gold viable.

The outlook

Gold will continue to be bullish overall, but I also recognize that there will be a lot of noise in general. This will remain a “buy on the dips” market, and I do think that eventually we get to the $2075 level. Anything above there could send this market rocketing higher, but I also recognize that we have a lot of geopolitical concerns out there that should continue to put at least a little bit of a short-term floor in this market. I remain bullish.

Crude Oil Monthly Forecast: March 2024

Persistent buying on dips in February. WTI eyes $80 for breakout, Brent targets $84.50. Geopolitical tensions and seasonal demand hint at potential surge.

• Crude oil has been extraordinarily resilient during the month of February as every time we have pulled back, we have seen buyers jumping back into the marketplace to take advantage of “cheap crude.”
• I suspect this will continue to be the case going into the month of March.

WTI Crude Oil

The West Texas Intermediate Crude Oil market has been more of a “buy on the dip” market during the month of February, and as I write this article at the end of the month, it’s currently testing the 50-Week EMA. When I look at the chart, the most obvious level to pay attention to at this point in time is going to be the $80 level, and I think that’s the gateway to much higher pricing. If and when we can break above the $80 level, and I do think that happens, it’s very likely that this market will pick up another $8 per barrel in a relatively short order.

Brent

As per usual, the Brent Crude Oil market, or the UK Oil market if you are using CFDs, is following right along with WTI Crude Oil. The $84.50 level in this market is the gateway to higher pricing, and I think that gets broken as well. In that environment, I could see Brent going all the way to the $92 level rather quickly, and eventually reaching the $95 level. That being said I don’t think it reaches the $95 level in the month of March, but I do think that’s coming given enough time.

The outlook

At this point, I think that crude oil is simply very much like a beach ball being held under water. What I mean by this is that eventually we will break the surface, and when we do there should be quite a bit of follow-through. There are a lot of reasons to believe that crude oil will continue to go higher eventually, not the least of which will be the Houthi attacks in the Red Sea, and other geopolitical tensions in the Middle East.

Furthermore, supply is starting to dwindle, and of course we are starting to head into the time of year where demand picks up anyway. With that being the case, I think you have got a situation where the market is eventually going to explode to the upside, if for no other reason than seasonality.

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