Gold Price to Look Past Yellen, Draghi as "Brexit" Vote Looms
- Gold prices continue to hint at double top formation
- Crude oil prices find support, attempting a recovery
- “Brexit” may overshadow Yellen, Draghi comments
“Brexit” referendum pre-positioning continues to shape price action in the commodity markets. Gold prices have fallen in with the haven side of the sentiment divide, tracking US Treasury bond futures and the Japanese Yen lower after a round polls hinted at firming support for the “Remain” campaign. Meanwhile, crude oil prices are trading higher with stock prices as the prospect of a status-quo result in the UK bolsters risk appetite.
Looking ahead, central bank commentary is in focus. ECB President Mario Draghi is due to speak in the European Parliament while Fed Chair Janet Yellen is scheduled to testify on monetary policy in the US Senate. Under normal circumstances, Yellen’s remarks would take top billing with Feb policy in flux and the ECB largely on auto-pilot in the near term. This week’s singular focus on the UK referendum may elevate Draghi’s speech into the spotlight however.
With that said, it is unlikely to that anything other than direct leading clues on the likely “Brexit” vote result are going to see meaningful follow-through from financial markets. As it stands, S&P 500 futures are pointing toward a risk-on bias favoring continuation of overnight trends but another round of polling data favoring the “Leave” campaign may swiftly sour sentiment.
Did crude oil and gold trade as DailyFX analysts expected in 2Q? Find out here!
GOLD TECHNICAL ANALYSIS – Gold prices continue to stall below the $1300/oz figure, with negative RSI divergence hinting that a double top may be taking shape. Breaking below the 23.6%Fibonacci expansionat 1260.29 sees the next downside barrier at 1237.13, the 14.6% level. Alternatively, a daily close above the 1297.87-1303.62 area (38.2% Fib, May 2) targets the 50% expansion at 1328.25.
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices are attempting a recovery after finding support above the $45/barrel figure. Near-term resistance is at 49.56, the 14.6% Fibonacci expansion, with a daily close above that exposing the 23.6% level at 51.86. Alternatively, a reversal below the 23.6% Fib retracement at 45.60 targets the 38.2% threshold at 41.86.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya's analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.