Gold Prices May Hold Key Support as Fed Rate Decision Looms

2017-09-18 03:42:00

Talking Points:

Gold prices may hold at key support as Fed rate decision looms
Crude oil prices looking to EIA drilling report for direction cues
See our guide to learn long-term crude oil trend fundamentals

Gold prices fell as improving risk appetite on Wall Street – epitomized by a new record high on the benchmark S&P 500 index – drove capital flows out of the safety of Treasury bonds and drove yields higher. That understandably undermined the appeal of non-interest-bearing assets.

From here, the yellow metal may struggle to find near-term direction as all eyes turn to the Fed monetary policy announcement. The central bank is expected to unveil “quantitative tightening” (QT) to wind down its massive post-crisis balance sheet and update official interest rate hike path projections.

Crude oil prices marked time after rebounding to a four-month high, as expected. The monthly EIA Drilling Productivity report now enters the spotlight. Traders are likely keen to see the extent to which hurricane-related output disruptions affected the US output counterweight to OPEC-led production cuts.

Retail traders expect gold to go up. Find out here what that hints about the actual price trend!

GOLD TECHNICAL ANALYSIS – Gold prices are probing below support at 1321.51 (23.6% Fibonacci retracement, trend line), with a daily close below that paving the way for a challenge of the 1295.46-99.25 area (38.2% level, double top). Alternatively, a turn back above the 14.6% Fib at 1335.24 targets the September 8 high at 1357.50.

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices stalled after testing resistance marked by the August 1 high at 50.40. A break above this threshold on a daily closing basis exposes the May 25 top at 51.97. Alternatively, a reversal below trend line resistance-turned-support at 49.08 opens the door for a retest of the September 11 low at 46.98.