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GOLD & CRUDE OIL TALKING POINTS:

  • Gold prices fell on more modest disinflation than analysts expected
  • Crude oil prices rose in risk-on trade, ignoring IEA and DOE data
  • US retail sales statistics and monthly API report now in the spotlight

Gold price seesawed with the release of January’s US CPI data, initially jumping higher as the benchmark on-year inflation rate fell to 1.6 percent – the lowest level since September – but swiftly reversing downward. The drop was more modest than economists’ projected decline to 1.5 percent, which might explain the prompt reversal. The US Dollar tellingly rose as the figures hit the wires.

Crude oil prices traded higher in the meanwhile, shrugging off a larger-than-expected weekly build in inventories and a monthly IEA report projecting oversupply in 2019 as swelling non-OPEC output swamps cooling demand. A modestly risk-on bias appeared to account for this resilience, driven by hopes for a breakthrough in US-China trade talks and the fading threat of another US government shutdown.

US RETAIL SALES DATA, MONTHLY API REPORT ON TAP

Looking ahead, December’s US retail sales report may punish gold if the outcome echoes the recent tendency of data flow from the world’s largest economy to outperform relative to forecasts. Meanwhile, crude oil’s defiant strength will be tested once again as the monthly API statistical report is released. It may serve as yet another reminder of the adverse fundamental landscape.

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

GOLD TECHNICAL ANALYSIS

Gold prices remain stuck above a dense support range above 1294.10. A daily close below this barrier would breach the bounds of the upswing from mid-November, exposing 1276.50 initially. Alternatively, a conclusive break above resistance at 1323.60 opens the door for a challenge of the trend-defining barrier in the 1357.50-66.06 area.

Gold price chart - daily

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices rose to retest near-term resistance, but a bearish Evening Star candlestick pattern continues to hint that a top is in the works. The setup would be invalidated on a daily close above the February 4 high at 55.75, with such a move exposing the 57.96-59.05 area next. Alternatively, a breach below support in the 49.41-50.15 zone sets the stage for a move toward retesting 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