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Talking Points:

  • Crude oil prices succumb to profit-taking after Brent touches $70/bbl figure
  • Gold prices may extend gains if US inflation, retail sales figures disappoint
  • What are the forces driving long-term crude oil price trends? Find out here

Cycle-sensitive crude oil prices reveled in a broadly risk environment, with the US-based WTI contract tracking S&P 500 futures higher for much of the day. The advance fizzled however after the international Brent crude benchmark touched the psychologically significant $70/barrel figure for the first time since December 2014. That seemed to trigger profit-taking, bringing prices broadly lower.

Gold prices advanced, buoyed by a weaker US Dollar in the wake of disappointing PPI data. The higher-profile CPI inflation gauge as well as the retail sales report are now in focus. Softer results echoing recently disappointing US news-flow may cool near-term Fed rate hike bets, pushing the yellow metal further upward. Markets now price the probability of tightening in March at 82 percent.

What do retail traders’ bets suggest about gold price trends? Find out here!

GOLD TECHNICAL ANALYSISGold prices continue to oscillate in a choppy range above the $1300/oz figure, with negative RSI divergence warning that downturn may be brewing ahead. A break below the 61.8% Fibonacci retracement as 1311.34 confirmed on a daily closing basis opens the door for a retest of 1297.08, the 50% level. Alternatively, a breach above the 76.4% Fib at 1328.98 targets the September 8 high at 1357.50.

Crude Oil Prices Succumb to Profit-Taking, Gold Eyes US Data

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices produced a Shooting Star candlestick below resistance at 64.32, the 50%Fibonacci expansion. The setup hints at indecision and may precede a reversal downward. A move below the 38.2%Fibonacci expansion at 62.31 paves the way for another challenge of the 23.6% levelat 59.83. Alternatively, a push above the 50%Fibat 64.32 exposes the 61.8% expansion at 66.33.

Crude Oil Prices Succumb to Profit-Taking, Gold Eyes US Data

Chart created using TradingView

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

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