Talking Points:

  • Crude oil prices edge up on EIA data but familiar range still remains
  • Gold prices may shrug off Dudley comments, focus on US PPI figures
  • Are commodities matching our forecasts so far in Q3? Find out here

Crude oil prices drifted to the top of August’s narrow range as EIA inventory data showed US stockpiles shed 6.45 million barrels last week, beating forecasts calling for a 2.2 million draw. The result echoed an API estimate published on the prior day, which may have robbed it of greater market-moving potential.

The OPEC Monthly Oil Report is in focus from here. Data showing the cartel struggling to reduce output courtesy of member states exempt from coordinated production cuts – like Libya – may stoke market skepticism about the effort’s potency and weigh on prices.

Gold prices was one of the few assets to maintain anti-risk momentum triggered as the war of words between the US and North Korea escalated yesterday. Treasury bonds and the Yen retraced gains and the S&P 500 erased all of its intraday losses by session’s close. The metal set a two-month high in the meantime.

The spotlight now turns to US PPI statistics. The wholesale inflation rate is expected to tick up to 2.1 percent in July, revisiting the three-year high set in May. A better-than-expected print echoing recent improvement in US news-flow may fuel bets on a similar outcome when CPI data prints on Friday, sending gold lower.

New York Fed President Bill Dudley is also scheduled to speak to the press. The influential policymaker is often seen as representative of the consensus on the rate-setting FOMC committee. He may strike a cautiously hawkish tone but markets seem to be more responsive to data than Fed-speak lately.

Retail traders expect gold to rise further. Find out here what this hints about the actual price trend!

GOLD TECHNICAL ANALYSISGold prices surged, posting the largest daily gain in three months and taking out August’s prior swing high. From here, a daily close above the 38.2% Fibonacci expansion at 1277.59 exposes the 50% level at 1285.74. Alternatively, a reversal back below the 23.6% Fib at 1267.51 opens the door for a retest of a chart inflection point at 1260.85.

Crude Oil Prices May Fall as OPEC Data Shows Glut Persisting

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices remain range-bound below the 61.8% Fibonacci retracementat 50.19. A daily close above this barrier exposes the 76.4% level at 52.11. Alternatively, a reversal below the 50% Fibat 48.65 targets the 47.10-29 area (38.2% Fib, July 4 high, trend line).

Crude Oil Prices May Fall as OPEC Data Shows Glut Persisting

Chart created using TradingView

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

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