Gold prices declined as better-than-expected US CPI data triggered an up-shift in the projected Fed rate hike path, pushing the US Dollar higher alongside front-end US Treasury bond yields and undermining support for anti-fiat assets. Crude oil prices were likewise pressured lower but late-day rebound brought the WTI benchmark off its lows following news that clashes at the Ras Lanuf port forced Libya to halt the first shipment from the facility since 2014. News of returning Libyan supply has weighed on prices recently.
Looking ahead, a quiet economic calendar may leave commodities in consolidation mode as traders withhold directional conviction ahead of critical event risk later in the week. Needless to say, the FOMC rate decision takes top billing. A much-anticipated monetary policy review due alongside the BOJ rate decision may also prove market-moving it if related volatility spills out into broader risk on/off gyrations across financial markets. Finally, OPEC-linked news flow is an ever-present catalyst as the cartel’s Algiers meeting draws closer.
What to past gold and crude oil price patterns hint about on-coming moves? Find out here!
GOLD TECHNICAL ANALYSIS – Gold prices have stalled near familiar support in the 1303.62-08.00 area (May 2 high, 38.2% Fibonacci retracement). A break lower confirmed on a daily closing basis exposes the 50% level at 1287.29. Alternatively, a move back above the 23.6% Fib at 1333.62 sees the next upside barrier marked by a falling trend line at 1348.40.
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices continue to test support in the 42.73-43.02 area (50% Fibonacci expansion, September 1 low). A daily close below this barrier exposes the 61.8% level at 41.26. Alternatively, a reversal back above the 38.2% Fib at 44.20 targets the 23.6% expansion at 46.02.
— Written by Ilya Spivak, Currency Strategist for DailyFX.com