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Gold Prices Eye US Tax Reform as Crude Oil Weighs Supply Trends

Gold Prices Eye US Tax Reform as Crude Oil Weighs Supply Trends

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • Crude oil prices look to EIA, JODI data to inform global supply/demand trends
  • Gold prices may fall on US tax cuts vote but follow-through may prove lacking
  • What do retail traders’ bets hint about commodity price trends? Find out here

Commodity prices were little-changed Friday, oscillating in familiar territory as traders digested the preceding week’s developments. Crude oil prices are now looking to the EIA drilling data as well as JODI statistics on global output and export trends as markets continue to weigh whether OPEC-led production cuts will be sufficient to offset robust US production.

Meanwhile, gold prices are likely to focus on US tax cut legislation. Last-minute horse trading appeared to deliver enough votes to pass the Republican-led plan on Friday and a vote may happen as soon as today. Successful adoption may boost risk appetite and weigh on the yellow metal as bond yields drop, but follow-through might prove lackluster if the effort is as thoroughly priced in as it seems.

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GOLD TECHNICAL ANALYSISGold prices are consolidating last week’s sharp recovery. A daily close above the 38.2% Fibonacci retracement at 1260.38 targets the 50% level at 1267.81. Alternatively, a move back below the 23.6% Fib at 1251.18 exposes the December 12 low at 1236.32 anew.

Gold Prices Eye US Tax Reform as Crude Oil Weighs Supply Trends

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continue to trace out a Triangle chart pattern, which carries bullish continuation in this scenario, if confirmed. A daily close above the Triangle top (58.41) exposes the 23.6% Fibonacci expansion at 59.83. Alternatively, a move below the pattern’s floor (56.26) targets the 23.6% Fib retracement at 55.04.

Gold Prices Eye US Tax Reform as Crude Oil Weighs Supply Trends

Chart created using TradingView

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

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

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