Gold, Crude Oil Prices May Fall More as US CPI Adds to Fed Impact

Talking Points:

  • Gold prices penetrate as Fed upgrades 2017 rate travel projection
  • Crude oil prices underneath glow as FOMC spurs US Dollar rally
  • Commodities might face to deeper waste on US CPI report

Gold prices slumped as a Federal Reserve upgraded a opinion for a 2017 seductiveness rate travel path. Policymakers now design to lift a benchmark lending rate 3 times subsequent year, adult from a span of increases projected in September.

Chair Yellen did her pinnacle to play down a change, observant usually handful of FOMC officials holding into comment a rarely capricious effects of destiny mercantile process were obliged for a ceiling deposit in executive bank’s normal view. The markets paid small mind however.

Yields soared alongside a US Dollar, undermining direct for non-interest-bearing and anti-fiat assets, falling changed metals. Crude oil prices serve declined as a greenback’s gains practical de-facto offered vigour to a USD-denominated WTI benchmark.

Looking ahead, November’s US CPI report headlines a information docket. Expectations call for a baseline acceleration rate to arise to a 25-month high during 1.7 percent. An upbeat imitation in line with a new fibre of upside surprises might fuel serve steepening of a priced-in tightening path, punishing commodities.

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GOLD TECHNICAL ANALYSISGold prices accelerated downward anew after a brief duration of consolidation, falling to a lowest turn in 10 months. Near-term support is now during 1130.18, a 38.2% Fibonacci expansion, with a mangle next that on a daily shutting basement targeting a 50% turn during 1112.37. Alternatively, a pierce behind above a 23.6% Fib during 1152.21 opens a doorway for a retest of a 14.6% enlargement during 1165.80.

Gold, Crude Oil Prices May Fall More as US CPI Adds to Fed Impact

CRUDE OIL TECHNICAL ANALYSISCrude oil prices posted a largest decrease in dual weeks, retreating behind next a $51/bbl figure. From here, a daily tighten next a 38.2% Fibonacci retracement during 49.78 exposes a 50% turn during 48.33. Alternatively, a annulment behind above a 23.6% Fib during 51.58 targets a 14.6% retracement during 52.58.

Gold, Crude Oil Prices May Fall More as US CPI Adds to Fed Impact

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

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