Gold Price, Crude Oil Price: Breakouts Ahead of Fed Rate Decision
Gold and Crude Oil Prices, Analysis and Charts:
Q3 2019 Goldand Oil Forecasts and Top Trading Opportunities
Gold Finally Breaks Through Resistance
After trading in a symmetrical triangle for the last couple of weeks, gold has finally broken higher just ahead of the FOMC rate decision later today. We have looked at this set-up recently and mentioned that an upside break was on the cards, but we felt that it was more likely to happen post-FOMC meet, when the rate decision and possible forward guidance was known. While the move is technically positive, it may be reversed post-FOMC if the Fed disappoints, so care is needed. If the move higher continues, gold is set-up to re-test the recent 6+ year high of $1,453/oz. made of July 18.
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Gold Price Daily Chart (January – July 30, 2019)
IG Client Sentiment data show that 67.9% of retail traders are net-long of gold, a bearish contrarian indicator. However, recent daily and weekly positional changes suggest that gold prices may move higher despite traders remaining net-long.
Crude Oil Breaks 200-Day Moving Average, US-China Fears Curb Move
Crude oil pushed higher late Tuesday after the latest API data showed a much larger-than-expected inventory drawdown, fueling expectations of a supportive DOE numbers later today. The move pushed crude oil back above the 200-day moving average, the first clean break for two weeks and opens the way for a rebound back to $65.80/bbl. before a re-test of the recent $67.50/bbl. high. Again, traders must be wary of the FOMC rate decision later today. While a 0.25% rate cut is fully priced in, both gold and oil may need the Fed to err on the dovish side to keep the commodity rally in place. If Fed chair Jerome Powell surprises with a 50-basis point cut, or comes out with a dovish forward guidance, gold and oil may reach their upside targets sooner rather than later.
Crude Oil Daily Price Chart (January – July 31, 2019)
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