Gold, Crude Oil Prices May Weaken Further on Hawkish Powell Speech

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GOLD & CRUDE OIL TALKING POINTS:

  • Commodity costs drop as US Dollar features earlier than Jackson Hole symposium
  • Gold prices retreat from resistance, crude oil rally stalls at former help
  • Hawkish Fed Chair Powell speech might hold uncooked supplies beneath strain

Commodity costs turned decrease Thursday following the prior periods’ features as a restoration within the US Dollar pressured property denominated by way of the benchmark unit (as expected). Perennially anti-fiat gold costs appeared to replicate the foreign money’s restoration most instantly whereas crude oil costs merely stalled having scored the largest daily gain in 2 months Wednesday.

GOLD, CRUDE OIL PRICES AT RISK ON HAWKISH POWELL SPEECH

The dollar advanced alongside two-year Treasury bond yields because the priced-in 2018 rate of interest hike path implied in Fed Funds futures steepened. The transfer in all probability marks pre-positioning forward of a much-anticipated speech from Fed Chair Jerome Powell on the central financial institution’s Economic Symposium in Jackson Hole, Wyoming on Friday.

The annual gathering is usually used to unveil steerage signaling the course of coverage within the subsequent months. Mr Powell is probably going to make use of the event to reiterate that the Fed intends to proceed with gradual rate of interest hikes regardless of admonitions from President Donald Trump and doubtlessly destabilizing spillover past US borders.

Familiar worries about commerce wars, rising market jitters and a possible development slowdown within the second half of the yr will in all probability re-emerge, echoing minutes from Augusts’ FOMC meeting revealed earlier this week. Articulating policymakers’ dedication to tightening regardless of these headwinds might proceed to drive commodities decrease because the Dollar extends features.

Learn what other traders’ gold buy/sell decisions say in regards to the value development!

GOLD TECHNICAL ANALYSIS

Gold costs retreated from resistance defining the down development started in mid-June. Support begins at 1160.37, the August 16 low, with a every day shut under that concentrating on the 38.2% Fibonacci enlargement at 1127.93. Alternatively, a rebound and breach above support-turned-resistance at 1204.59 targets the 1236.66-40.86 space.

Gold price chart - daily

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices stalled at support-turned-resistance guiding the uptrend from February. A every day shut above its outer boundary – now at 68.90 – exposes the 69.89-70.41 space subsequent. Alternatively, a push under help within the 63.96-64.26 zone opens the way in which for a problem of swing low help at 61.84.

Crude oil price chart - daily

COMMODITY TRADING RESOURCES

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

To contact Ilya, use the feedback part under or @IlyaSpivak on Twitter



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