Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View More
Gold Prices Drop as Macron Leads First Round in French Election

Gold Prices Drop as Macron Leads First Round in French Election

Ilya Spivak,

Talking Points:

  • Gold prices drop as first round of French election boosts risk appetite
  • Crude oil prices sink even as OPEC mulls more extending output cuts
  • Chinese oil imports data, energy sector earnings reports now in focus

Gold prices are facing heavy selling pressure after the outcome of the first-round vote in the French presidential election brightened market sentiment. Bond yields shot up as capital poured out of haven assets and the priced-in 2017 rate hike path implied in Fed Funds futures steepened. Not surprisingly, this proved to bode ill for non-interest-bearing assets including the yellow metal.

The risk-on mood may keep gold on the defensive. Futures tracking the FTSE 100 and the S&P 500 equity benchmarks are pointing firmly higher in late Asian trade. That suggests bond prices will probably remain on the defensive, keeping yields well-supported and undermine precious metals. Comments from Minneapolis Fed President Neel Kashkari, the Fed’s most prominent dove, may slow momentum however.

Crude oil prices sank even as OPEC officials signaled emerging agreement on extending a coordinated production cut scheme introduced late last year through the end of 2017. Investors seem increasingly convinced that swing supply – particularly from North America – will offset the cartel-led effort. Data from Baker Hughes put the number of active US oil extraction rigs at the highest in two years last week.

From here, Chinese energy import statistics, due at 6:30 GMT, may continue to illuminate the supply/demand narrative. First-quarter corporate earnings releases from Haliburton and Range Resource Corporation may help also help illuminate the landscape as two of the industry’s heavyweights offer their thoughts on where prices might be heading.

What will drive crude oil and gold price trends through mid-year? See our forecasts to find out!

GOLD TECHNICAL ANALYSISGold prices are flirting with breaking the near-term uptrend set from mid-March having turned downward as expected. A daily close below rising trend line support – now at 1275.54 – exposes the 14.6% Fibonacci expansion at 1258.62. Trend-defining resistance remains in the 1288.32-1308.00 area (trend line, April 17 high, former support).

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices fell for a sixth consecutive day, making for the longest losing streak in almost six months. Support is now in the 48.56-85 area (trend line, 61.8% Fibonacci expansion), with a daily close below that exposing the 47.08-69 zone (March 22 low, 76.4% level). Alternatively, a move back above the 50% Fib at 49.78 targets the 38.2% expansion at 50.71.

Chart created using TradingView

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

To receive Ilya's analysis directly via email, please SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES