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GOLD & CRUDE OIL TALKING POINTS:

  • Gold price chart setup hints a top may be forming near $1350/oz
  • Crude oil prices may not find lasting support in EIA drilling data
  • Commodities bracing for heavy-duty event risk in the days ahead

Gold prices probed higher to touch a 14-month high on Friday but the move unraveled – with the metal erasing all of its intraday advance to end the session fractionally lower – as the US Dollar rose alongside Treasury yields in the wake of supportive economic data. The upbeat results also buoyed risk appetite, lifting cycle-sensitive crude oil prices alongside stocks.

COMMODITY PRICES BRACE FOR HEAVY-DUTY EVENT RISK AHEAD

Looking ahead, a quiet start to the trading week may be on the menu as traders shy away from strong conviction one way or another ahead of tectonic event risk in the coming days. Wednesday’s FOMC meeting takes top billing but commentary from the ECB Forum on the need for further easing may to be potent as well, even as EU heads of state decide who is next to lead the central bank.

The monthly EIA Drilling Productivity Report might offer a bit of a lift to oil prices. Leading rig count data from Baker Hughes suggests the number of active extraction sites in the US has dropped to a 14-month low last week. That seems to speak to a slowdown in output growth which could be seen as price-supportive. Inventories have continued to swell all the same however, so any such notions might be quick to fade.

Did we get it right with our crude oil and gold forecasts? Get them here to find out!

GOLD TECHNICAL ANALYSIS

Gold prices put in a dramatic Shooting Star candlestick pattern on a test of resistance marked by February’s swing highat 1346.75. That coupled with negative RSI divergence suggests upside momentum is fading and hints that a top is forming. A daily close below initial support in the 1323.40-26.30 area exposes the 1303.70-09.12 zone. Alternatively, a move back above 1346.75 eyes the 1357.50-66.06 regionnext.

Gold Price Chart Hints at Topping Before Key Fed Policy Meeting

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices remain range-bound above support in the 50.31-51.33 area. Breaking below it on a daily closing basis opens the door to retest a price floor in play since September 2016 in the 42.05-43.00 zone. Alternatively, a rebound above the upper layer of near-term resistance at 55.75 sets the stage to challenge the 57.24-88 region.

Gold Price Chart Hints at Topping Before Key Fed Policy Meeting

COMMODITY TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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