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CRUDE OIL & GOLD TALKING POINTS:

  • Crude oil prices rise amid broad-based recovery in risk appetite
  • Gold prices gain despite rising yields as US Dollar turns lower
  • Upbeat sentiment may continue to buoy oil, gold eyeing US CPI

Crude oil prices rose alongside stocks as risk appetite firmed across financial markets, boosting cycle-sensitive commodities. Gold prices likewise traded higher as despite an uptick in bond yields as the US Dollar retreated, boosting the appeal of anti-fiat alternatives.

CRUDE OIL MAY FOCUS ON RISK TRENDS, GOLD EYES US CPI DATA

Looking ahead, the monthly IEA Oil Market Report may echo ominous cues in analogous EIA and OPEC publications yesterday. Both projected further US output gains and ebbing energy demand (although the former foresaw a narrow rise in uptake for liquid fuels).

Meanwhile, official DOE inventory flow data is expected to show stockpiles added 1.6 million barrels last week. A supportive surprise may be in store however if the outcome proves to be broadly in step with API projections calling for a 998k drawdown.

While such developments seem to offer conflicting cues, sentiment trends might tip the scales in favor of crude oil price gains. Bellwether European and US stock index futures are pointing convincingly higher, another risk-on session is ahead.

Meanwhile, gold may find its most potent catalyst in January’s US CPI report. It is expected to show that core on-year inflation cooled to 2.1 percent, the lowest in three months. An upbeat result echoing recent outperformance on US news-flow might boost the Greenback at the expense of the yellow metal.

See our guide to learn about the long-term forces driving crude oil prices!

GOLD TECHNICAL ANALYSIS

Gold prices continue to hover above a dense support region running through 1294.10. Breaking below it on a daily closing basis initially exposes 1276.50. Alternatively, a push higher that takes prices back above resistance at 1323.60 targets a potent barrier in the 1357.50-66.06 area.

Gold price chart - daily

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices swung higher toward resistanceat 55.75, the February 4 high. A daily close above this threshold exposes the 57.96-59.05 area. Alternatively, a reversal downward that breaches support in the 49.41-50.15 zone sets the stage for a move toward the 42.05-55 region.

Crude oil price chart - daily

COMMODITY TRADING RESOURCES

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

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