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GOLD & CRUDE OIL TALKING POINTS:

  • Gold prices pinned in place by diverging US Dollar, bond yields
  • Crude oil prices echo risk trends on US-China trade war worries
  • EU Commission forecast update, API and EIA data due ahead

Conflicting influences from the US Dollar and benchmark Treasury bond yields pinned gold prices in place yesterday. A volatile response to signs of escalation in the US-China trade war traced out inverse whipsaw price swings that put the metal’s defining anti-fiat and non-yielding attributes in conflict.

Crude oil prices tracked stock performance. First, WTI and S&P 500 futures sank in tandem as trade war headlines hit the wires. The two then recovered in lockstep as market sentiment trends moved to normalize toward pre-panic levels.

All the same, the mood still seems to be uneasy. Shell-shocked investors are on the lookout for headline risk, troubled by confirmation of a looming tariff hike from the White House but heartened by indications that a Chinese delegation set to arrive in Washington this week will still make the trip.

How this story develops from here may prove pivotal, leaving traders reluctant to commit to a directional bias until fresh clues emerge. Price action may be muted in the interim. Updated economic forecasts from the EU Commission are likely to deliver downgrades, which might make for a risk-off lean.

The weekly release of API inventory flow data is also due. It will be weighed against expectations of a 1.2 million barrel rise to be reported in official government figures Wednesday. An updated EIA Short-Term Energy Outlook report is also on the docket.

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

GOLD TECHNICAL ANALYSIS

Gold prices are coiling up below the $1300/oz figure, wedged between resistance capping gains since late February and support establishing the uptrend from mid-August 2018 lows. The completion of a bearish Head and Shoulders top argues in favor of a downside bias. A daily close below 1260.80 exposes the 1235.11-38.00 area. Alternatively, a break above 1294.79 eyes the 1303.70-09.12 zone next.

Gold price chart - daily

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are testing support at 60.39, with a break confirmed on a daily closing basis setting the stage to challenge the 57.24-88 area. Forays topside face a dense layer of resistance running through 67.03. Breaching beyond that puts the $70/bbl figure into focus.

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