GOLD & CRUDE OIL TALKING POINTS:
- Gold prices up as the Fed recommits to ultra-loose policy stance
- Crude oil prices down alongside stocks as risk appetite unravels
- S&P 500 futures signal risk-off pivot might find follow-through
Gold prices rose as the Federal Reserve painted a bleak picture of economic conditions, promising to keep monetary policy ultra-accommodative for the foreseeable future. That helped bolster the appeal of anti-fiat alternatives epitomized by the yellow metal.
Interestingly, the US Dollar is trading higher against this backdrop. That may have little to do with the currency’s yield appeal and more with the markets’ disappointment in the Fed’s slow-moving approach. Dithering on steps to expand support cooled risk appetite, speaking to USD’s safe-haven appeal.
The risk-off tilt was on full display for cyclically-sensitive crude oil prices, which tracked stocks downward in the aftermath of the Fed rate decision. Bellwether S&P 500 futures now point sharply lower, signaling more of the same is likely ahead.
GOLD TECHNICAL ANALYSIS
Gold prices are edging toward the top of the choppy range encasing price action since mid-April. Its top is marked at 1765.30, the May 18 high, with a close above that likely needed to revive upward momentum. Alternatively, a drop below support in the 1679.81-93.92 area may tag the 38.2% Fibonacci retracement at 1645.40 next.
Gold price chart created using TradingView
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices may be topping below resistance in the 42.40-43.88 area as negative RSI divergence bolsters the formation of a bearish Dark Cloud Cover candlestick pattern. Breaking support at below 34.78 seems to initially expose the 27.40-29.11 inflection zone. Alternatively, a move past resistance may bring on a challenge of the $50/bbl figure.
Crude oil price chart created using TradingView
COMMODITY TRADING RESOURCES
- See our free guide on the drivers of crude oil price trends
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--- Written by Ilya Spivak, Head APAC Strategist for DailyFX
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
