Gold, Crude Oil Prices Overlook US Consumer Confidence Jump

Talking Points:

• Gold prices continue to mark time above $1100/oz figure
• Crude oil prices await direction cues near monthly high
• Holiday liquidity drawdown may boost kneejerk volatility

Gold and crude oil prices continue to mark time in familiar territory amid thin holiday trade. Yesterday’s upbeat US Consumer Confidence report did not inspire a meaningful response and on-coming home sales data will probably fall on deaf ears as well. The figures’ implications for near-term Fed policy trends are limited at best considering that – by central bank officials’ own admission – much depends on execution of the incoming Trump administration’s fiscal program.

With that in mind, sideways trade seems likely to continue. This should not be a reason for complacency however. Kneejerk volatility can be amplified by diminished liquidity if the markets are startled by a particularly potent unforeseen news-flow.

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GOLD TECHNICAL ANALYSIS – Gold prices remain in digestion mode above the $1100/oz figure. A break below the 38.2% Fibonacci expansionat 1120.72 exposes the 50% level at 1099.91. Alternatively, reversal back above the 23.6% Fib at 1146.47 confirmed on a daily closing basis targets the 14.6% expansion at 1162.35.

CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices continue to consolidate near monthly swing highs. A daily close above resistance in the 54.66-55.15 area (38.2% Fibonacci expansion, trend line) exposes the 50% level at 56.11. Alternatively, a turn below horizontal pivot support at 51.91 targets the 38.2% Fib retracement at 49.80.

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

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