GOLD & CRUDE OIL TALKING POINTS:
- Gold prices inch closer toward producing bearish chart pattern
- Commodities fall with stocks as US Dollar gains on haven flows
- Downbeat Q4 US GDP revision may prolong risk-off disposition
Gold prices put the lie to the often-repeated mantra that the metal is some kind of “haven” asset. They fell alongside stocks, cycle-sensitive commodities including crude oil and (interestingly enough) Treasury bond yields as risk appetite deteriorated. That stoked haven demand for the US Dollar, with the benchmark currency’s gains tarnishing the appeal of anti-fiat assets.
US GDP DOWNGRADE MAY PROLONG RISK-OFF MOOD, HURT COMMODITIES
Looking ahead, a revised set of fourth-quarter US GDP figures is expected to put annualized growth at 2.3 percent, a downgrade from the prior estimate of 2.6 percent. A downside surprise echoing the soggy state of recent data flow may spur continued re-risking and extend yesterday’s price dynamics, with commodities broadly lower as sentiment sours and the Greenback gains.
Learn what other traders’ gold buy/sell decisions say about the price trend!
GOLD TECHNICAL ANALYSIS
Gold prices are back to testing near-term support in the 1303.70-09.12 area, teasing a break that might put them on course toward forming a choppy Head and Shoulders top. That would require a subsequent breach of the would-be pattern’s neckline, now at 1282.54. Initial resistance is at 1326.30, followed by the February swing top at 1346.75.
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices are treading water, but a still-valid bearish Evening Star candlestick pattern continues to warn of topping. Initial support is in the 57.24-88 area, with a daily close below that confirming a reversal and exposing the 55.37-75 zone next. Alternatively, a break above the 38.2% Fibonacci expansion at 60.45 exposes the 50% level at 62.28.
COMMODITY TRADING RESOURCES
- See our guide to learn about the long-term forces driving crude oil prices
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- Join a Trading Q&A webinar to answer your commodity market questions
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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