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TALKING POINTS – CRUDE OIL & GOLD PRICES

  • Gold prices may turn from chart resistance as market mood brightens
  • Soft US retail sales report might limit down move as Fed outlook dims
  • Crude oil eyeing Kuwait Oil & Gas summit, EIA drilling data for cues

Gold prices traded higher as the markets’ mood soured in late North American trade on Friday, sending capital fleeing to the relative safety of Treasury bonds and depressing yields. That offered a familiar lift to non-interest-bearing assets epitomized by the yellow metal.

The move may have marked de-risking before the weekend as markets weighed tensions in Syria and seemingly mounting pressure on the White House from Special Counsel Robert Mueller. He is investigating possible links between the Trump campaign and Russian interference in the 2016 election.

Crude oil prices edged gently higher but didn’t make substantive progress, producing a fifth consecutive increase but also marketing the smallest daily gain in the series. Volumes in the bellwether WTI contract fell to a one-week low, perhaps signaling traders’ reticence to participate as geopolitical risk heats up.

SYRIA, US DRILLING AND RETAIL SALES DATA IN FOCUS

From here, soundbites from the Kuwait Oil and Gas Summit may inform bets on the degree to which an increasingly volatile Levant impacts global supply. OPEC Secretary-General Barkindo may try to defuse fears that conflict between proxies of Iran and Saudi Arabia may scuttle coordinated output cut efforts.

Meanwhile, the EIA will publish monthly drilling productivity statistics. If they suggest swelling US extraction will dull the impact of any geopolitically-linked disruptions, crude oil prices may turn lower. Baker Hughes data put the number of active oil rigs at a three-year high last week.

As for gold, it may turn lower as investors’ mood brightens despite Western military action against Syrian targets over the weekend. S&P 500 futures are pointing decidedly higher, hinting that bond yields may rise against a broadly “risk-on” backdrop.

US Retail Sales data is expected to show receipts added 0.4 percent in March, snapping a three-month losing streak. A disappointing outcome echoing recent deterioration relative to forecasts in US economic news-flow might cool Fed rate hike bets and limit downside follow-through however.

See our quarterly gold forecast to learn what will drive prices through mid-year!

GOLD TECHNICAL ANALYSIS

Gold prices’ nascent upswing has been checked by familiar resistance in the 1353.87-57.50 area (double top, falling trend line). A daily close above this barrier exposes the July 2016 high at 1375.15. Alternatively, a turn below near-term rising trend support – now at 1335.11 – would open the door for another challenge of range support at 1307.25.

Gold Prices May Fall Despite Syria Jitters, US Retail Sales Due

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are stalling at a critical resistance cluster in the 66.63-67.49 area (January 25 high, rising channel top, 38.2% Fibonacci expansion). A daily close above that exposes the 50% level at 70.38. Alternatively, a move below the 23.6% Fib at 63.90 targets the channel floor at 62.45.

Gold Prices May Fall Despite Syria Jitters, US Retail Sales Due

COMMODITY TRADING RESOURCES

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

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