Gold Prices Back on the Defensive After Upbeat Yellen Comments
- Gold prices on the defensive after upbeat Yellen comments
- Crude oil prices attempting to build back to monthly high
- Year-end flows cap gold drop, API inventory data on tap
Gold prices are back on the defensive after two days of shallow gains as hawkish comments from Fed Chair Janet Yellen put the hawkish shift in Fed monetary policy expectations back in the spotlight. Downward momentum may find few barriers for continuation amid a lull in relevant event risk over the near term but a possible pre-holiday pullback in the US Dollar remains an important upside risk.
Crude oil prices advanced on news that Iraq plans to cut supply by 200-210k barrels per day in the first half of next year. This suggests one of OPEC’s leading producers and previously a sceptic of the cartel’s output cut scheme is set to begin its implementation. The preliminary estimate of weekly inventory flows from API will be in focus in the hours ahead.
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GOLD TECHNICAL ANALYSIS – Gold prices remain locked in a narrow range below the $1200/oz figure. A daily close below the 38.2% Fibonacci expansion at 1118.98 exposes the 50% level at 1097.71. Alternatively, a reversal back above the 23.6% Fib at 1145.30 targets the 14.6% expansion at 1161.52.
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices are poised attempting to build back toward monthly highs. A daily close above the 23.6% Fibonacci expansion at 52.84 targets the 54.48-63 area (December 12 high, 38.2% level). Alternatively, a move back below the 14.6% expansion at 51.73 exposes the December 15 low at 49.93.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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