Gold Prices May Struggle if US PPI Helps Cool Fed Rate Cut Bets
GOLD & CRUDE OIL TALKING POINTS:
- Gold prices retreat into familiar range as US CPI tops expectations
- Crude oil prices digesting gains, chart setup hints uptrend resuming
- Commodities may struggle if US PPI data cools Fed rate cut bets
Gold prices pulled back, erasing over half of Wednesday’s Fed-inspired rally, after US CPI data unexpectedly showed that core inflation accelerated in June. Cooled rate cut bets and sent bond yields higher alongside the US Dollar, tarnishing the appeal of non-interest-bearing and anti-fiat assets. Crude oil prices marked time, digesting yesterday’s rise to a seven-week high.
US PPI DATA MAY LIMIT SCOPE FOR GOLD, CRUDE OIL PRICE GAINS
Bellwether S&P 500 futures are pointing higher in late Asia Pacific trade, hinting at a risk-on bias as both yields and the Greenback pull back anew. That might be supportive for commodities if momentum is sustained. Follow-through may be cut short if incoming US PPI dataechoes yesterday’s CPI results however and inspires another rethink of Fed easing prospects.
Get the latest gold and crude oil forecasts to see what will drive prices in the third quarter!
GOLD TECHNICAL ANALYSIS
Gold prices continue to oscillate in a choppy range below resistance clustered around the August 2013 high at 1433.85. An upside breakout opens the way for a foray above the $1500/oz figure. A dense support bloc extends down from 1375.15 through 1346.75, leaving sellers’ work cut out for them if a downside reversal is attempted in earnest.
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices have stalled at resistance in the 60.04-84 zone after breaking trend line resistance set from late April. The setup hints the uptrend late-December 2018 lows has resumed. A push higher from here targets the 63.59-64.43 congestion area. A series of back-to-back support levels runs down through 54.84, with a turn back below that opening the door to retest the $50/bbl figure.
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 free webinar and have your commodity market questions answered
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.