#Gold and #WTI #CrudeOil Monthly Forecast: May 2024

Gold Monthly Forecast: May 2024

• Gold continues to be very noisy as the month of April was very choppy.
• This does make a certain amount of sense considering that gold shot straight up in the air over the course of the last couple of months, and therefore I think we needed to spend a little bit of time breathing and perhaps even soaking in some of the momentum.

Because of this, I think the month of May will be very difficult. I don’t mean this in the sense that I think the month of May will be necessarily negative, just that the markets could see a little bit in the way of volatility that causes issues. Ultimately, in the short term I do think that anytime we get a significant pullback, there will be plenty of buyers willing to jump in and take advantage of this market. With that being said, gold is a market that has a lot of different things working for it at the same time and therefore I think you have to look at this through the prism of whether or not risk appetite is increasing or falling, as well as many other things.

Looking at this chart, it’s obviously a bullish one, so at this point in time I remain very bullish on gold. That doesn’t mean that we will get a significant pullback, but I would probably keep an eye on this market as one that is a good way to play risk appetite. Furthermore, we also have to pay close attention to the interest rate markets, because they continue to see a lot of higher rates, and that has people a bit concerned. However, if we were to break down below there, then the $2200 level could be an area that I would become even more aggressive at. After all, that just means that gold is much cheaper. As far as buying at these high levels, then I think you have to be a little bit more cautious in the sense that we are a bit overstretched.

I suspect that most of this month will probably be about consolidation, but I also recognize that we will possibly break out to the upside or even downside, but either way the trend will remain the same. In other words, this is a “long only market” at the moment.

WTI Crude Oil Monthly Forecast: May 2024

• The West Texas Intermediate Crude Oil market has been very noisy during the month of April as we continue to see a lot of tension in the Middle East.

At this point though, it looks like the war is not going to spread any further, and I think a lot of traders are starting to relax a bit due to that. We had initially seen the market jump, but since then we have seen nerves settle a bit as the Iranians chose not to accelerate the war itself. That being said, you need to keep in mind that there is a certain amount of geopolitical risk when it comes to this market, and therefore you have to be very cautious about getting too aggressive.

Underneath, we have the $80 level and I think the $80 level end up being a short-term floor in the market. This is as the $85 level above offers a certain amount of resistance. After that, then we have the $87.50 level offering significant resistance as well. Ultimately, we could go racing toward the $90 level, but I think at this point in time we need to see some type of specific reason. After all, we do have a cyclical trade in the fact that the demand for crude oil tend to pick up this time of year, but at the end of the day, the supply isn’t as bad as it once was feared to be.

That being said, the risks in this market are probably higher to the upside than they are to the downside, as there are so many undeterminable geopolitical issues that could come in and cause chaos in this market. Because of this, I look at pullbacks as a buying opportunity and you probably will get that during the month of May. I’d be especially interested near the $80 level, but it doesn’t necessarily have to be in that area. Quite frankly, the lower we go, the more interested I am in buying in this market. On the other hand, this is a market that I think will continue to see a lot of volatility so be cautious with your position sizing. Longer-term, this is a market that I do think breaks higher and by the end of May it would not surprise me at all to see this market closer to the $87.50 level above.

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