Never miss a story from Ilya Spivak

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Ilya Spivak

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.


  • Gold prices unable to hold gains as sentiment shrugs off crude oil price spike
  • US Dollar, bond yields divergence eyed as Q1 earnings threaten risk aversion
  • Chart positioning argues for gold weakness, hints crude oil may turn lower

Gold prices were unable to sustain early-session gains, erasing its intraday advance to close Monday with a narrow loss. The metal enjoyed what seemed like reflexive support as traders scrambled to respond to news that the US will end Iran sanctions waivers.

That announcement understandably launched crude oil prices upward and stoked risk aversion as markets pondered the move’s potential adverse knock-on effects. A lasting upshift in energy prices bodes ill for already shaky global growth. Trade tensions with US allies like the EU and Japan may be upset.

Oil managed to sustain most of its rise, but sentiment recovered as Wall Street came online. Bond yields rose alongside shares as haven demand for Treasuries receded, undermining the relative appeal of non-interest-bearing assets. Not surprisingly, that saw gold’s gains evaporate.


From here, it seems telling that yesterday’s midday upturn in risk appetite was not discernibly triggered by discrete catalyst. Rather, the rise appeared to reflect an “evening-out” of exposure ahead of a busy week on the economic and corporate earnings calendars.

With that in mind, the case for follow-through seems suspect if the collective message from 26 constituents of the bellwether S&P 500 index due to report first-quarter results today is downbeat. The trend for this earnings season so far is not encouraging.

With close to a fifth of S&P 500 companies having reported, the trend in declining sales and earnings growth from the second quarter of last year is set to continue. In fact, markets are on pace to see the first quarter of negative on-year earnings growth in two years.

On balance, this sets the stage for a broadly defensive narrative. Crude oil may weaken alongside other cycle-sensitive assets against this backdrop. The response from gold will continue to depend on the relative magnitude of divergent moves in yields and the US Dollar.

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


Gold prices failed to sustain even a modest upswing to retest support-turned-resistance at the neckline of a bearish Head and Shoulders (H&S) chart pattern, slipping back toward the 4-month low set last week. Initial support is in the 1260.80-63.76 area, with a break below that targeting the 1235.11-38.00 zone next. The H&S setup implies a larger decline to 1215. A daily close back above the neckline – now at 1281.70 – opens the door for a retest of the $1300/oz figure.

Gold price chart - daily


Crude oil prices shot to a six-month high, testing resistance in the 66.09-67.03 area. A daily close above that puts the $70/bbl figure in the crosshairs. Negative RSI divergence warns of ebbing upside momentum however, warning a that the surge may not prove lasting. Confirming a substantive reversal from here calls for a daily close below rising trend support set from December, now at 62.16. Clearing that initially targets 60.39, followed by the 57.24-88 zone thereafter.

Crude oil price chart - daily


--- Written by Ilya Spivak, Currency Strategist for

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