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Gold, Crude Oil Prices May Weaken on Soft US Jobs Data

Gold, Crude Oil Prices May Weaken on Soft US Jobs Data

Ilya Spivak, Head Strategist, APAC

GOLD & CRUDE OIL TALKING POINTS:

  • Gold prices touch one-month low, but breakdown proves elusive
  • Crude oil price chart hints a downturn might be brewing ahead
  • Soft US jobs report could be broadly negative for commodities

Gold prices briefly touched a one-month low as the US Dollar recovered yesterday, sapping the appeal of anti-fiat alternatives. The move unwound intraday however, with traders apparently unwilling to commit to a directional bias. Crude oil prices pulled back a bit but held firmly within familiar trading ranges.

On balance, indecision probably reflects a slew of competing narratives pulling investors in opposite directions. On one hand, US-China trade talks seem to be moving along. On the other, evidence of global slowdown continues to pour in all the while Brexit remains a potent source of uncertainty.

US JOBS DATA MAY WEIGH ON GOLD, CRUDE OIL PRICES

Looking ahead, US jobs data is firmly in the spotlight. Payrolls growth is expected to pick in March while the jobless rate remains near a 50-year low while wage inflation matches the highest in a decade. A recent tendency for US news-flow to undershoot forecasts might make for disappointment however.

In this scenario, swelling concerns about a downshift in the global business cycle might cool risk appetite. The Greenback might attract haven demand in such a scenario, weighing on gold. Meanwhile, crude oil will probably track stocks and other sentiment-geared assets downward.

Positive soundbites emerging out of talks between US and Chinese officials still underway in Washington DC may countervail data-driven negativity somewhat. Recent signs of progress have conspicuously failed to boost sentiment in a lasting way however, and may likewise fizzle this time too.

See the latest gold and crude oil forecasts to learn what will drive prices in the second quarter!

GOLD TECHNICAL ANALYSIS

Gold prices are still trying to complete a bearish Head and Shoulders topping pattern. A daily close below neckline support at 1283.07 would act as confirmation, initially exposing the 1260.80-63.76 area next. Alternatively, a reversal back above support-turned-resistance in the 1303.70-09.12 zone sees the next upside barrier at 1326.30.

Gold price chart - daily

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices stalled after producing a Harami candlestick pattern below support-turned-resistance in the 63.59-64.43 area. The formation hints at indecision and may precede a downturn. A daily close below trend line support at 59.31 exposes the 57.24-88 zone. Alternatively, a move above 64.43 targets the 66.09-67.03 inflection region next.

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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