Gold Prices May Break Deadlock as US Data Drives Fed Speculation
- Crude oil prices surge on OPEC deal hopes, IEA report
- Gold prices mired in narrow range at technical support
- US data may stoke Fed speculation, nudge metals prices
Crude oil prices launched a sharp recovery after Saudi Arabia Energy Minister Khalid Al-Falih said next month’s informal OPEC meeting announced earlier this week will also include and producers outside of the cartel and may produce action to stabilize the market. An IEA report projecting drawdown in crude inventories as refiners rebuild stocks may have also helped upward moment.
Gold prices continue to mark time after last Friday’s sharp decline in the wake of better-than-expected US jobs report. Momentum may pick up in the final hours of the trading week as July’s US Retail Sales and Augusts’ preliminary University of Michigan consumer confidence data cross the wires. The results may stoke activitythe traders’ priced-in Fed rate hike expectations, where indecision has prevailed since post-Brexit deterioration was unwound three weeks ago.
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GOLD TECHNICAL ANALYSIS – Gold prices remain in consolidation mode above rising trend line support set from late May, now at 13378.24. A daily close below this barrier exposes the 38.2% Fibonacci retracement at 1308.00. Alternatively, a push upward above resistance in the 1366.19-77.75 area (double top, 38.2% Fib expansion) targets the 50%level at 1398.46.
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices turned sharply higher after finding support above the $41.00 figure. A daily close above the 43.94-44.40 area (July 11 low, 38.2% Fibonacci retracement) opens the door for a test of the 50% level at 45.41. Alternatively, a move back below the August 11 low at 41.09 targets the August 3 bottom at 39.17.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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