GOLD & CRUDE OIL TALKING POINTS:

  • Defensive shift in FOMC coverage steering could stoke world slowdown worries
  • Gold prices could fall if Fed-inspired danger aversion boosts haven USD demand
  • Crude oil prices could recoil from 11-month excessive if cycle-sensitive belongings drop

Benchmark commodity costs had been little-changed yesterday, with merchants seemingly withholding directional dedication till the much-anticipated FOMC charge choice is launched. No coverage adjustments are anticipated. Nevertheless, a palpably dovish flip in official rhetoric over latest months implies downgrades of development and inflation forecasts in addition to the projected coverage path are nearly actually within the playing cards.

The markets’ priced-in outlook – as mirrored in Fed Funds futures – argues for no charge hikes in 2019. Bringing official projections according to that may suggest a 50bps drop from December’s evaluation, which might be too drastic of an adjustment for slower-moving central bankers to make. Even that may solely ratify present positioning nevertheless, which means a very market-moving dovish shock is unlikely.

Chair Powell and firm’s defensive pivot could amplify already simmering world slowdown fears nevertheless. To the extent that this stokes de-risking throughout monetary markets, it could damage crude oil costs alongside different cycle-sensitive belongings. It might likewise put a premium on the unmatched liquidity of the US Dollar. A considerably counter-intuitive rise on these grounds bodes unwell for perennially anti-fiat gold costs.

Be taught what other traders’ gold buy/sell decisions say in regards to the worth pattern!

GOLD TECHNICAL ANALYSIS

Gold costs nonetheless look to be tracing out a considerably awkward Head and Shoulders topping sample. A day by day shut beneath neckline assist at 1282.11 would initially expose the 1260.80-63.76 space however broadly trace at a bigger drop to close 1220 thereafter. Alternatively, a breach of resistance within the 1303.70-10.95 zone units the stage to revisit February’s swing excessive at 1346.75.

Gold price chart - daily

CRUDE OIL TECHNICAL ANALYSIS

Crude oil costs are testing resistance marked by the 50% Fibonacci retracement at 59.63. A day by day shut above that opens the door for a check of former assist within the 63.59-64.43 space, bolstered by the 61.8% Fib at 63.71. Any substantive reversal decrease requires affirmation on a break beneath the 55.37-75 zone, which might mark invalidation of the uptrend from late December and expose the 50.31-51.33 area.

Crude oil price chart - daily

COMMODITY TRADING RESOURCES

— Written by Ilya Spivak, Foreign money Strategist for DailyFX.com

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





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