CRUDE OIL & GOLD TALKING POINTS:
- Commodity prices retreat as consumer confidence data boosts US Dollar
- Crude oil prices stall above $68/bbl figure with EIA inventory data on tap
- Gold prices may fall further if US GDP update keeps Fed hikes in focus
Commodity prices continued to reflect swings in the US Dollar on Tuesday. Unlike the prior two sessions however, this meant weakness as the Conference Board published impressively strong consumer confidence data that sent the benchmark currency upward.
Gold prices suffered as the greenback’s gains undermined the appeal of anti-fiat alternatives epitomized by the yellow metal. Meanwhile, crude oil prices succumbed to de-facto selling pressure because they are denominated in USD terms on global markets.
EIA INVENTORY DATA, US Q2 GDP UPDATE IN FOCUS
For oil, the spotlight now turns to EIA inventory flow data. Economists expect to see that crude storage shed 967k barrels last week. An API estimate published yesterday projected a 38k barrel increase. If today’s report hews closer to that, prices may be pressured downward.
Updated second-quarter US GDP figures are also due. The annualized growth rate is penciled in at 4 percent, the strongest in four years (albeit a bit lower than a prior estimate at 4.1 percent). If that helps keep Fed rate hikes in the spotlight, further US Dollar gains may see gold suffer further.
See our guide to learn about the long-term forces driving crude oil prices!
GOLD TECHNICAL ANALYSIS
Gold prices are hovering at counter-trend support guiding the upswing from mid-August lows. A daily close below this barrier, now at 1196.01, initially exposes the August 24 low at 1183.28. Alternatively, a push above the August 28 high at 1214.30 targets the 1235.24-41.64 region (Dec’17 support, 38.2% Fibonacci retracement).
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices are digesting gains after clearing resistance at 68.49, the 23.6% Fibonacci expansion. The next upside barrier is marked by the 38.2% level at 70.99, with a daily close above that targeting the 72.88-73.02 area (May 22 high, 50% Fib). Alternatively, a turn back below 68.49 eyes trend line support in the 64.91-66.73 region.
COMMODITY TRADING RESOURCES
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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