Talking Points:

  • Crude oil prices post largest gain in three weeks on API inventory data
  • Gold prices stall at chart resistance amid lull in Fed policy speculation
  • EIA inventories data in focus for WTI, gold may continue to consolidate

Crude oil prices posted the largest daily gain in three weeks after the American Petroleum Institute (API) reported that inventories fell by a hefty 12.1 million barrels last week. Official EIA inventory data is now in focus. Economists expect an increase of 905k barrels. A print a closer to the API estimate may offer the WTI contact another upward push. Furthermore, news-flow shaping bets on the outcome of an informal OPEC meeting in Algiers this month continues to be a source of volatility risk.

Gold prices stalled after the Fed’s Beige Book survey of regional economic conditions fell short of offering fresh fodder for rate hike speculation. Comments from Esther George and Jeffrey Lacker – Presidents of the Kansas City and Richmond Fed branches respectively – likewise passed with little fanfare. A status-quo ECB monetary policy announcement and a lull in Fed-linked event risk may see the consolidative tone persisting in the near term.

What do past crude oil price patterns hint about on-coming trends? Find out here!

GOLD TECHNICAL ANALYSISGold prices stalled after testing trend line resistance capping gains since early July. A turn lower from here sees initial support at 1333.62, the 23.6% Fibonacci retracement, with break below that exposing the 1303.62-08.00 area (May 2 high, 38.2% level). Alternatively, a daily close above the trend line – now at 1347.83 – opens the door for a test of the 1367.15-69.41 zone (double top, 38.2% Fib expansion).

Crude Oil Prices Surge on Inventories Data as Gold Treads Water

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continued to recover after putting in a bullish Piercing Line candlestick pattern, as expected. From here, a daily close above the 38.2% Fibonacci expansionat 46.76 exposes the 50% level at 47.92. Alternatively, a reversal back below the 23.6% Fibat 45.33 targets the 14.6% expansion at 44.45.

Crude Oil Prices Surge on Inventories Data as Gold Treads Water

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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