Talking Points:

  • Gold prices eyeing Fed-speak but follow-through may wait for US CPI report
  • Crude oil prices looking to OPEC/non-OPEC meeting for new direction cues
  • What will drive longer-term crude oil and gold trends? See the forecasts here

Gold prices declined as expected after July’s broadly better-than-expected US jobs report triggered a supportive shift in the Fed policy outlook. Scheduled comments from St. Louis and Minneapolis Fed branch presidents Jim Bullard and Neel Kashkari now enter the spotlight.

Both policymakers are relatively dovish so their remarks may cool tightening bets a bit and offer a lifeline to the yellow metal. Significant trend development seems unlikely for now however, with traders probably reluctant to commit until Friday’s US CPI data is released.

Crude oil prices are waiting for a fresh having stalled after the WTI benchmark tested the $50/bbl figure. All eyes now turn to Abu Dhabi, where representatives of top producers participating in OPEC-led production cuts are scheduled to meet to discuss compliance with the scheme.

Growing output in OPEC countries exempt from coordinated supply reduction – notably Libya – have bedeviled efforts to draw down a supply gut and boost prices. Comments indicating how the effort might be amended to account for this may revive volatility, though whether that means gains or losses is unclear.

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GOLD TECHNICAL ANALYSISGold prices broke through support guiding the one-month uptrend. From here, a daily close below the 23.6% Fibonacci expansion at 1252.62 targets the 38.2% level at 1239.33. Alternatively, a turn back above the chart inflection point at 1260.85 paves the way for a retest of the August 1 high at 1274.11.

Gold Prices Eye Fed Commentary After Sinking on US Jobs Data

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continue to mark time below the 61.8% Fibonacci retracementat 50.19. Negative RSI divergence still warns a turn lower might be ahead. Breaking below the 50% level at 48.65 on a daily closing basis opens the door for a test of the 47.10-29 area (38.2% Fib, July 4 high). Alternatively, a move above 50.19 exposes the 76.4% retracement at 52.11.

Gold Prices Eye Fed Commentary After Sinking on US Jobs Data

Chart created using TradingView

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

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