Gold Price Upswing May Precede FOMC Rate Decision
- Gold prices at standstill as markets look ahead to FOMC meeting
- Profit-taking on short exposure may drive corrective gold bounce
- Crude oil prices gain as OPEC looks for output cut participation
Gold prices are flat-lining absent fresh news-flow updating speculation about the Fed monetary policy outlook. Next week’s FOMC rate decision lines up as the next key inflection point. An upside correction may materialize amid profit-taking on short positions as traders entertain the possibility that the central bank envisions a shallower tightening path than what has been priced in after the US president election.
Crude oil prices turned higher, snapping a three-day losing streak, as traders looked ahead to a meeting of OPEC and non-OPEC producers over the weekend. The cartel aims to secure external participation in a last-minute output cut scheme agreed upon last week. Follow-through will probably have to wait for the meeting’s outcome to cross the wires however. Russia looks to be in while others like Mexico and Brazil passing.
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GOLD TECHNICAL ANALYSIS – Gold prices remain locked in a narrow range but positive RSI divergence continues to hint an on-coming bounce. Near-term resistance is at 1183.28, the 14.6% Fibonacci retracement, with a daily close above that exposing the 23.6% level at 1199.50. Alternatively, a drop below the 23.6% Fib expansion at 1158.15 targets the 38.2% threshold at 1133.83.
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices corrected higher after finding interim support below the $50/bbl having established a top as expected. A daily close above the 51.64-52.00 area (double top, 23.6% Fibonacci expansion) exposes the 38.2% level at 53.49. Alternatively, a reversal below the December 8 swing low at 49.60 targets the 38.2% Fib retracement at 48.49.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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