Buy Gold or Oil? Technical Levels for Short-Term Trading

The month of July started differently for gold and oil. On one side there is the yellow metal which, as can be seen from the chart below, continues to move in a very narrow price range between $2,300 and $2,350 an ounce while on the other there is oil which this morning has come close to the highest levels of the last two months. The current sentiment on the two most famous raw materials is completely different. While a cautious approach prevails on gold, euphoria rages on oil.

Which of the two raw materials is best to buy in this first phase of July? Is the buy on the more subdued gold or on the exuberant oil? Obviously we use the verb “buy” only for convenience since it would be unthinkable to buy barrels of physical oil. Much simpler is to speculate on both oil and gold through derivative instruments such as CFDs that allow you to trading without owning the underlying asset and in both directions, therefore both upwards and downwards. When we talk about gold and oil CFDs, our thoughts rightly go to brokers. However, not everyone knows that even an Italian bank like Fineco allows you to do CFD trading under very interesting conditions.

But let’s get back to the protagonists of this post, namely gold and oil. Where is the buy in the short term?

Gold looking to have a calm July?

The legacy of June is destined to weigh heavily for a good part of July as well. This is the most reliable outlook for the price of gold in the new month. This is what technical analysis says. With a trend compressed between 2,300 and 2,350 dollars an ounce, gold seems to have gotten stuck in an interlocutory phase from which it cannot get out. Bullish traders perhaps expected something more but this was not the case and most likely will not be the case in the coming weeks.

While there could also be a slight recovery, it is really difficult to think that we can see gold above $2,340 an ounce in the coming weeks.

Unless there are major upheavals, which at this point could only come from the fundamental framework, The price of gold in the first weeks of July is expected to remain at current rates. Let’s be clear: the upward trend is not destined to end, however it is better to forget about great leaps forward. In this context, a simpler strategy to implement could be to buy in the retracement phases and then exploit the possible subsequent rise. Volatility, however, is expected to be contained and this would make trading in gold more difficult for novice traders.

Maybe you might also be interested in — Gold Forecast 2024: All Price Hypotheses. Bullish Prevalence?

Is the buy on oil?

As previously mentioned, the situation experienced by oil is almost the polar opposite of that of gold. This morning, Brent crude is moving in the $86 per barrel area while WTI futures have risen above this level. Thanks to the new exploit, the oil price has clearly set its sights on the highs of the last two months.

The rally may not end here because The catalysts that drove the rally at the end of June are set to weigh like millstones in July as wellWe are referring to the increase in fuel demand in the summer months, to expectations of a FED rate cut and lastly to tensions in the Middle East (one step away from the conflict between Israel and Lebanon) and to fears for the now upcoming hurricane season in the USA with the consequent possible production stoppages by plants located along the Atlantic coast.

This is the picture from a fundamental analysis perspective. Then there are the technical levels to consider and these seem to do nothing but confirm the bullish view. Breaking through the wall of 82 dollars is as if crude oil had put a mortgage on a further extension and in fact first 84 dollars were hooked and then 86. It is clear that after the decline at the end of May, crude oil has rebounded and is continuing to do so. The fact that in the summer the demand for gasoline is higher does nothing but bode well for the coming weeks.

The prevailing scenario is bullish: at least in the short term there is not much room for decline.

Traders who wish to take advantage of this situation could try to identify temporary technical retracements to enter and buy at lower prices with the near certainty of being able to profit from subsequent increases.

So, to sum up the question of whether in the short term it is better to buy gold or oilthe answer can only be favorable to the second. While black gold due to the context seems to have a clear path, gold seems to have much narrower margins due to the absence of catalysts.

To trade gold and oil from the same platform you can use both brokers like eToro and banks like Fineco:

• eToro: a broker that allows you to trade CFDs on many raw materials including oil and gold, eToro offers the copy trading tool with which you can replicate the strategies of the best traders.

• Fineco: allows you to trade oil and gold with CFDs as well as offering a huge selection of ETFs on both commodities. Two types of accounts are available including trading only without banking services and without fixed costs.

This content should not be considered investment advice. We do not offer any type of financial advice. The article is for informational purposes only and some content is Press Releases written directly by our Clients.
Readers are therefore required to carry out their own research to verify the updating of the data. This site is NOT responsible, directly or indirectly, for any damage or loss, real or alleged, caused by the use of any content or service mentioned on the site https://www.borsainside.com.