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GOLD & CRUDE OIL TALKING POINTS:

  • Gold prices fall on hawkish shift in Fed rate hike expectations
  • Crude oil prices shrug off EIA inventory data, focus on OPEC+
  • Markets eyeing OPEC Seminar, US-China trade war news flow

Gold prices fell for a fourth day, hitting a six-monthlow. The move tracked inversely of a rise in US Treasury bond yields as the priced-in rate hike path implied in Fed Funds futures steepened. Hawkish comments from Fed Chair Jerome Powell at the ECB Forum as well as a broader recovery in risk appetite that bolstered confidence in the US central bank’s ability to proceed with tightening likely drove the move.

Meanwhile, crude oil prices failed to make good on an upswing after EIA data showed inventories fell more than expected last week as all eyes remain on Friday’s OPEC+ meeting in Vienna. That will update the group’s strategy on its coordinated production cut scheme. Russia and Saudi Arabia are pushing to relax output curbs, a move opposed by some top exporters (such as Iraq).

GOLD EYES TRADE WAR NEWS, OPEC SEMINAR CONTINUES

Looking ahead, a lull in top tier scheduled event risk may give gold prices some room to digest losses before the next trend move. Still, markets remain highly sensitive to headlines informing how the US-China trade war might progress. A stray soundbite from either Washington or Beijing may yet engage sentiment trends, translating into a volatility for the yellow metal.

Background - A Brief History of Trade Wars, 1900-Present

Meanwhile, crude oil is likely to be focused on the second day of the OPEC International Seminar. The gathering may offer a preview of what is to happen when the cartel’s ministers are joined by representatives of like-minded producers – notably Russia – for a strategy session later in the week. The API monthly statistical report is also due to cross the wires.

Learn what other traders’ gold buy/sell decisions say about the price trend!

GOLD TECHNICAL ANALYSIS

Gold prices are pressuring support in the 1260.80-66.44 area, with breakdown confirmed on a daily closing basis exposing the December 2017 low at 1236.66. Alternatively, a move back above support-turned-resistance marked by the May 21 low at 1282.27 paves the way for another test of the $1300/oz figure.

Gold Prices Sink to Chart Support, Crude Oil Focused on OPEC

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices remain in digestion mode above support in the 63.96-64.26 area. A daily close below this barrier opens the door for a test of the April 6 low at 61.84. Trend-defining resistance establishing a broadly bearish bias remains in the 66.22-67.36 zone.

Daily crude oil prices in USD

COMMODITY TRADING RESOURCES

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

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter