Crude Oil Prices Eye Inventory Data, Yellen May Drive Gold Lower

Talking Points:

  • Crude oil prices arise as EIA trims US outlay bet, API reports vast register drop
  • Gold prices corner aloft before Yellen speech, might shelter on hawkish commentary
  • What will expostulate wanton oil and bullion trends in a subsequent 3 months? See a forecasts

Crude oil prices suffered intraday amid reports that Saudi Arabia breached a outlay share it concluded to as partial of a OPEC-led prolongation cut effort. The pierce fast fizzled however as a markets braced for a recover of and updated EIA short-term appetite opinion and API register upsurge statistics.

The discreet tinge valid prescient. The EIA downgraded a foresee for US prolongation and API pronounced inventories mislaid 8.13 million barrels final week, a drawdown good in additional of 2.26 million outflow approaching by investors. The WTI benchmark responded with a largest daily benefit in dual weeks.

From here, executive DOE register figures as good as a OPEC monthly report are on tap. The World Petroleum Congress holding place in Istanbul might also beget market-moving commentary, generally if a cartel-led organisation of tip producers spirit they are open to shortening outlay further.

Gold prices corrected aloft forward of dual days of much-anticipated Congressional testimony from Fed Chair Janet Yellen. Her remarks might infer wilful in shutting a opening between a executive bank’s process expectations and those of a markets.

The rate-setting FOMC cabinet envisions one some-more rate travel this year. Investors are dubious, putting possibility of another boost in 2017 during only 48 percent. Much this doubt seems formed on recently softening inflation, that a Fed maintains is temporary.

Recent mercantile information suggests there is some consequence to a Fed’s argument. With that in mind, Yellen might use a testimony to make her box for serve tightening. If she is amply convincing, a hawkish change in a markets’ baseline opinion is expected to pull bullion prices lower.

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GOLD TECHNICAL ANALYSISGold prices are attempting a miscarry after contrast a reduce range of a down trend in play given early June. A daily tighten above a 14.6% Fibonacci retracement during 1218.04 targets a 23.6% turn during 1226.26. Alternatively, a annulment next a 23.6% Fib enlargement during 1210.86 exposes a 38.2% threshold during 1199.41.

Crude Oil Prices Eye Inventory Data, Yellen May Drive Gold Lower

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices have reclaimed a foothold above a draft rhythm indicate during 45.32, opening a doorway for another exam of a 38.2% Fibonacci retracement during 47.10. Alternatively, a pierce behind next 45.32 – now recast as support once again – exposes a May 5 low during 43.79.

Crude Oil Prices Eye Inventory Data, Yellen May Drive Gold Lower

Chart combined regulating TradingView

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

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