GOLD & CRUDE OIL TALKING POINTS:
- Gold prices poised to probe above $1800/oz after chart resistance break
- Crude oil prices may struggle if EIA inventory data echoes API results
- Sentiment trends in focus, S&P 500 index futures flagging risk-on bias
Gold prices shot higher as the US Dollar retreated from intraday highs on Tuesday amid hopes for a breakthrough in deadlocked Brexit negotiations, with a spirited GBP/USD advance seemingly echoing as broader weakness for global reserve currency.
The news did not extend to broader sentiment, keeping yields anchored. That allowed the yellow metal to capitalize on anti-fiat demand without the countervailing headwind of higher rates, which has accompanied recent risk-inspired bouts of USD weakness.
Crude oil likewise found support as the Greenback stumbled. Gains unraveled however as API data suggested that US inventories added 2 million barrels last week. By contrast, the markets expect official EIA figures to print a 3.2-million-barrel drawdown later today. A surprise in API’s favor may feed selling pressure.
Looking ahead, a quiet data docket may leave sentiment trends in focus. Bellwether S&P 500 stock index futures are pointing higher to flag a risk-on tilt. Gold may try to extend gains as the Dollar weakens but a true upswell in risk appetite will probably boost yields, limiting gains. Crude oil may gain ground.
GOLD TECHNICAL ANALYSIS
Gold prices overcome resistance at 1789.78, the 38.2% Fibonacci expansion. The 50% Fib at 1827.82 marks the next upside threshold, with a push above that eyeing the 61.8% level at 1864.86 next. Alternatively, a turn back through support 1747.74 may expose 1679.81 thereafter.
Gold price chart created using TradingView
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices remain adrift below resistance in the 42.40-43.88 area. Negative RSI divergence hints at the possibility of topping, but confirmation is absent for now. A daily close below 34.78 may then expose the 27.40-29.11 area. Alternatively, a breach of resistance is likely to target the $50/bbl figure next.
Crude oil price chart created using TradingView
COMMODITY TRADING RESOURCES
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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
