Gold Price Surge May Falter as US, Russia Weigh Syria and Ukraine

Talking Points:

  • Gold prices swell as seductiveness rates decrease amid risk aversion
  • Crude oil prices arise on Saudi support for outlay cut extension
  • Commodities might shelter new pierce on US/Russia bargain

Gold prices surged as risk hatred swept financial markets. Haven-seeking collateral flows pushed adult Treasury holds and sent yields reduce while a priced-in 2017 Fed rate travel opinion pragmatic in futures markets flattened. This bolstered a relations interest of non-interest-bearing resources including a yellow metal.

A risk-off mood might continue to interpret into bullion gains as US Secretary of State Rex Tillerson travels to Russia, where a tactful showdown looks expected after final week’s missile strike opposite Syria. Indeed, SP 500 futures are down alongside internal bourses in Asian trade, hinting that investors sojourn on edge.

While Tillerson’s tongue hardened during a G7 assembly this week, he also reportedly questioned “why US taxpayers should be meddlesome in Ukraine”. That might spirit during a probable discount that has Russia trade some easing of Ukraine-linked Western vigour for dialing behind support of Syrian personality Bashar al-Assad.

Signs indicating to a presentation of such an accommodation might be interpreted as de-escalation by investors, opening a doorway for a liberation in market-wide sentiment. That might see rates resilient as Treasuries retreat, putting bullion prices behind on a defensive.

Crude oil prices continued to impetus aloft amid reports that Saudi Arabia will support fluctuating final year’s OPEC prolongation cut settle into a second half of a year. API reported that US inventories mislaid 1.3 million barrels final week, assisting to pull prices upward.

If signs of a fledgling bargain between a US and Russia drip out, easing supply intrusion fears might import on appetite prices. Selling vigour might be gradual if EIA register information falls closer in line with API’s guess than a accord foresee job for a smaller 772.2k tub weekly draw.

Will bullion prices continue to arise in 2Q? See a forecast to find out what’s pushing marketplace trends!

GOLD TECHNICAL ANALYSISGold prices pennyless trend line insurgency running a pierce reduce given Jul 2016, hinting a poignant change of instruction is during hand. From here, a daily tighten above a 61.8% Fibonacci enlargement during 1282.31 opens a doorway for a exam of a 1302.90-08.00 area (76.4% level, former support). Alternatively, a annulment next a Feb 27 high during 1263.87 exposes a 1241.50-49.01 segment (chart rhythm point, 38.2% Fib).

Gold Price Surge May Falter as US, Russia Weigh Syria and Ukraine

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices rose for a fourth uninterrupted day. Near-term insurgency stays during 53.57, a 50% Fibonacci expansion, with a mangle above that exposing a 55.10-21 area (January 3 high, 61.8% level). Alternatively, a spin behind next 38.2% Fib during 50.04 paves a approach for a retest of a 23.6% enlargement during 50.14.

Gold Price Surge May Falter as US, Russia Weigh Syria and Ukraine

Chart combined regulating TradingView

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

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