Morgan Stanley raised its price forecast for Brent crude for 2026 to $60 per barrel from $57.50 following OPEC+’s decision to pause production hikes over the first three months of next year.

This was the first oil price forecast revision after the Sunday meeting of the oil-producing group, which also produced one last output hike of 137,000 barrels daily for December.

“Even if the OPEC announcement does not change the mechanics of our production outlook, it does send an important signal,” the bank’s analysts said in a note, quoted by Bloomberg. “With OPEC involvement, volatility is reduced.”

Investment banks have been quick to revise their price predictions for international oil benchmarks after almost every OPEC+ meeting, with the revisions being invariably in the downward direction amid expectations of a supply overhang emerging this year and extending into 2026.

According to ING’s head of commodity analysis, Warren Patterson, OPEC+’s decision to pause the hikes is an acknowledgment of that fundamentals imbalance. “Obviously, still plenty of uncertainty over the scale of the surplus, which will be dependent on how disruptive U.S. sanctions will be to Russian oil flows,” Patterson said, as quoted by Reuters, today.

RBC Capital Markets’ Helima Croft, for her part, noted Russia as a wild card, both because of the latest U.S. sanctions that have seen the two biggest importers of Russian crude shun it in favor of sanction-free alternatives, and because of continued Ukrainian attacks on oil infrastructure that could threaten supply security.

“There is ample ground for a cautious approach given the uncertainty over the Q1 supply picture and the anticipated demand softness,” Croft said, as quoted by Reuters. The latest Ukrainian attack targeted the oil export terminal at the port of Tuapse yesterday. According to reports, the fire that the attack caused had damaged a ship.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com

Momentum and Extension

Bullish momentum dominates, but the advance is getting extended and could benefit from a short correction. The high touched a top rising channel line — a 200% extension of the original channel from August’s low. The original top line was touched with recent lows after placement at October’s swing high (B) showing recognition of the pattern. This extension suggests caution, as overbought conditions may invite profit-taking.

Upside Targets

A strong close and Tuesday breakout could target $4.41-$4.45, combining the 78.6% Fibonacci retracement and 161.8% projection for a larger ABCD pattern than that currently on the chart. Today’s advance also triggered a monthly breakout above October’s $4.16 high, with June’s high also a monthly peak. October’s $4.12 close was the second-highest monthly since January 2023, reinforcing bullish momentum and structural strength.

Long-Term Implications

Sustaining above the June high opens a challenge to March’s $4.90 trend high. A daily close above the June high provides technical evidence of underlying strength, supporting recovery after any correction. Resistance may persist near the extended top channel line, but price can rise while staying below it given the angle — allowing room for gradual upside.

Downside Support

Short-term support sits at last week’s $4.16 high and today’s $4.09 low. Further down, the 38.2% retracement at $3.88 aligns with a top rising channel line. The 50% retracement at $3.75 matches October 29’s low, offering a deeper floor if tested.

Outlook

The close above $4.16 is key — above it targets $4.41-$4.45, below risks $4.09. The breakout and monthly signal favor bulls if $3.88 holds. Watch channel extension — $4.90 follows on strength, but a pullback may test support first. Momentum remains bullish unless $4.09 fails.

For a look at all of today’s economic events, check out our economic calendar.

Resistance Test

The breakdown forms a lower swing high after Friday’s test of resistance at a top rising channel line. This line had provided support for several days following last month’s $54.49 peak. Once price turns down from a prior dynamic support area, the short-term trend gains credibility and risks continuation. The 20-day average at $49.70 serves as the other key dynamic resistance to monitor on any rebound attempt.

Upside Potential

A decisive advance above today’s high could challenge last week’s $49.38 high. The 20-day line would then become the next resistance barrier, along with the 50% retracement at $50.02. Last week completed a potential bullish hammer candle, but the pattern remains invalid until a breakout above the week’s high occurs. Given last week’s wide range and today’s bearish behavior, silver may drop deeper into that range before buyers step in with conviction.

Channel Dynamics

Last week’s swing low was $45.55, near the 50% retracement at $45.72 and the centerline of a rising trend channel — providing clear validation for the pattern. Friday’s price action further confirmed this support. The high nearly touched a 200% extended top channel line (dashed blue), while the original channel is bounded by black trendlines. Silver continues to respect these parameters, showing technical awareness in the market.

Support Levels

Key dynamic support is the rising 50-day average at $45.62, now converging with the 50% level. It offers a lower target on continued weakness. Having advanced above the $45.55 swing low, it reduces near-term break risk and suggests a breakout above last week’s high could spark renewed demand and bullish momentum. However, the 20-day must also be exceeded first to shift the short-term trend.

Outlook

A closing price below $48.37 is decisive — below it targets $45.62, above it tests $49.38. The narrow range and channel support favor a measured pullback. Watch 50-day convergence — holding it keeps the long-term trend intact, while a break risks a deeper correction. Today’s action leans bearish until $49.38 is cleared.

For a look at all of today’s economic events, check out our economic calendar.

Gold (XAU/USD) Fails to Hold $4,000 as Dollar Strength and Fed Outlook Trigger Consolidation

Gold (XAU/USD) is trading just above $4,000 per ounce, down from its early October high of $4,314, as renewed dollar strength and a more hawkish Federal Reserve tone weigh on the metal. It currently fluctuates between $4,004 and $4,028, marking the first time this month it slipped under the key $4,000 level. The drop came after Fed Chair Jerome Powell suggested that the latest 0.25% rate cut might be the last for 2025, causing traders to sharply lower their expectations for another December cut—from 90% to about 70%. That shift in sentiment has slowed gold’s Q3 rally and pressured prices lower. Meanwhile, the U.S. Dollar Index (DXY) remains firm near 99.9, its highest reading since August, creating a direct headwind for bullion.

Fed Policy, Treasury Yields, and the Global Safe-Haven Shift

The Federal Reserve’s tightening tone and stable 10-year Treasury yield at 4.31% have reduced gold’s appeal in the short term by increasing the opportunity cost of holding a non-yielding asset. Simultaneously, improved risk sentiment after the Trump–Xi tariff truce extension reduced safe-haven demand, while easing U.S.–China tensions limited geopolitical inflows into gold. The impact was compounded by China’s decision to end tax incentives on domestic gold sales, curbing demand from small jewelry traders and retail investors. Despite this, large-scale institutional and central bank purchases continue to provide long-term structural support. Central bank reserves tied to gold have now exceeded $1.5 trillion, highlighting the continued trend of diversification away from the U.S. dollar.

Technical Structure: Consolidation Between $3,850 and $4,100 Defines the Battle Zone

Technically, gold’s price action remains confined to a consolidation channel between $3,850 and $4,100. The 20-day EMA sits near $4,021.87, while the 50-day and 100-day EMAs overlap between $3,860–$3,880, forming the short-term demand zone. The $3,850 mark is a key pivot—if it holds, buyers could drive a rebound toward $4,250–$4,314, the recent October peak. A break below that level, however, opens the door for deeper corrections toward $3,660. The RSI has cooled from an overbought 80 to a neutral 54, suggesting consolidation rather than trend reversal. A close above $4,100 would trigger the next bullish breakout toward $4,450–$4,500, while a drop below $3,850 would confirm a short-term downtrend.

Macro Drivers and Central Bank Positioning Keep Long-Term Trend Intact

Fundamentally, gold’s structural outlook remains bullish despite this pause. Central banks across emerging and developed economies continue adding to reserves, accumulating roughly $220 billion in 2025 alone. This accumulation reflects concern over global debt—now exceeding $35 trillion in the U.S.—and inflation expectations that remain anchored near 2.9% for 2026. Real yields are still near zero, preserving gold’s long-term attractiveness as a strategic hedge. These macro imbalances, combined with slowing growth and high government borrowing, continue to anchor gold’s role as an inflation shield and portfolio stabilizer even as speculative flows soften.

Impact of Chinese Market Dynamics and Global Physical Demand

China’s withdrawal of retail tax benefits for domestic gold sales temporarily pressured demand, particularly among small-scale dealers. However, premiums on the Shanghai Gold Exchange remain elevated at roughly $45 per ounce, showing that underlying demand persists. In India, festival season buying continues to support regional markets, with dealers reporting stable trade volumes at approximately $3,970 per ounce, reinforcing global price resilience below $4,000. These strong physical flows, combined with institutional accumulation, indicate that dips toward $3,850 are being viewed as buying opportunities by large market participants.

Intermarket Correlation: Silver’s Surge and Dollar Strength Tug-of-War

The strength in the dollar has created a tug-of-war across precious metals. Silver (XAG/USD), currently at $48.66, remains near its 2025 peak of $53.34, outpacing gold’s percentage gains for the year. The gold-to-silver ratio of 82:1 indicates silver’s relative undervaluation, often a bullish signal for gold in the medium term. However, near-term movements remain dictated by the DXY, which could soften if upcoming U.S. CPI or ISM manufacturing data show weakness, potentially reigniting gold’s next upward leg toward $4,250 and beyond.

Market Sentiment: Hedge Funds Trim Longs While ETFs Hold Steady

Data from the CFTC show speculative funds trimming long exposure by 7% over the past two weeks, with short positions increasing to 28,500 contracts. However, long-term investors remain committed, as ETF holdings like SPDR Gold Shares (GLD) stand firm at 879 tonnes, just 0.2% lower than the previous month. This indicates that while short-term traders are locking profits, strategic investors are maintaining core positions. The resilience of institutional demand contrasts with the heavy liquidation seen in earlier market cycles, emphasizing that this correction is part of a broader accumulation phase.

Short-Term Catalysts and Key Price Levels Ahead

The market’s immediate focus is whether gold can maintain support between $3,850 and $3,880 amid renewed Treasury yield strength. A move above $4,100 could open the door toward $4,250–$4,314, while a breakdown below $3,850 exposes $3,660, and potentially $3,500 if momentum accelerates. The long-term anchor remains the 200-day EMA near $3,388, the lower bound of the current bullish cycle. Traders are now watching upcoming inflation data, job numbers, and Fed commentary for clues on whether the next breakout occurs before year-end or in early 2026.

Outlook: Momentum Cooling, Structural Bull Market Intact

Gold is in a cooling phase after a historic run through 2025, and this consolidation is more technical than fundamental. The broader bull cycle remains intact, supported by central bank diversification, long-term inflation hedging, and systemic fiscal pressure. The inability to reclaim $4,100 keeps short-term momentum subdued, but once regained, it could catalyze the next advance toward $4,500 and eventually $5,000.

Verdict: HOLD with Bullish Medium-Term Bias

The overall stance for XAU/USD remains HOLD. Short-term tone is neutral to mildly bearish toward $3,850–$3,880, while medium-term direction points upward. The next sustainable breakout is likely once the market clears $4,100–$4,250, with structural targets at $4,450–$4,500, extending toward $5,000 if real yields continue to ease and global reserve accumulation accelerates

That’s TradingNEWS

Natural gas price approached its last bullish rally at $4.210, which forced it to form sideways trading, affected by stochastic exit from the overbought level, to settle near $4.110.

Reminding you that the stability of the trading above the extra support level at $3.830 confirms the continuation of the positive trading in the near and medium period, which makes us wait for gathering extra bullish momentum, to ease the mission of reaching the bullish channel’s resistance at $4.320, which forms a key for detecting the main trend in the upcoming trading.

The expected trading range for today is between $4.060 and $4.320

Trend forecast: Bullish