Gold Prices Dip on Macron Win, Crude Oil Still Looks Vulnerable

Talking Points:

  • Gold prices drop on Macron win, demeanour to Fed-speak for subsequent move
  • Crude oil prices boomerang from new 2017 low though sojourn vulnerable
  • Muted response to OPEC jawboning hints oil selloff might resume

Gold prices quickly peaked down to a six-week low as Emmanuel Macron triumphed in a second spin of a French presidential election. The outcome cheered investors, pulling bond yields quickly aloft and weighing on a non-yielding yellow steel by extension.

The pierce valid ephemeral however. Mr Macron bested hard-right opposition Marine Le Pen by a domain of 65 to 35 percent, an outcome resolutely in line with baseline projections brazen of a vote. That means a outcome did not offer investors anything quite novel, undercutting follow-through.

Comments from Cleveland and St. Louis Fed Presidents Loretta Mester and James Bullard are now in focus. They might pass sensitively however deliberation a markets’ near-term rates opinion seems to be resolutely in place. That might banish prices to digestion mode (unless an unscheduled matter emerges, of course).

Crude oil prices probed down to a lowest spin nonetheless this year amid what looked like accelerating liquidation on Friday. The pierce mislaid movement and topsy-turvy march intraday however, with a WTI benchmark finale a day with an upside tighten that snapped a five-session losing streak.

The liberation tracked a miscarry in SP 500 futures, that in spin played out opposite a backdrop of a firming Euro. This hints that confidence might have reflected expectations of Mr Macron’s win. Needless to say, if this was indeed a salvation offering to wanton oil, it has been spent.

That leaves prices in a unsafe position going forward. Baker Hughes supply count information put a series of active descent sites during a two-year high while CFTC statistics showed net-long bearing to WTI futures has forsaken to a lowest in 6 months.

Tellingly, what seemed like understanding comments from Saudi Energy Minister Khalid Al-Falih failed to excite buyers in Asian trade. This hints that OPEC jawboning about prolongation cuts might have turn insufficient and warns that murder might shortly return.

Retail traders are betting on aloft bullion prices. Find out here what that hints about a cost trend!

GOLD TECHNICAL ANALYSISGold prices are digesting waste after attack a lowest spin given mid-March. From here, a mangle next 1218.90 – an rhythm indicate in play a commencement of a year – exposes a 38.2% Fibonacci enlargement during 1199.07. Alternatively, a annulment behind above support-turned-resistance during 1241.50 targets a 14.6% spin during 1258.62.

Gold Prices Dip on Macron Win, Crude Oil Still Looks Vulnerable

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices managed to reason support during 45.33, a 61.8% Fibonacci retracement. From here, a pierce behind above insurgency during 47.22, a 50% Fib, opens a doorway for a retest of 49.11 (38.2% Fib, trend line support-turned-resistance). Alternatively, a daily tighten next support exposes a 76.4% retracement during 43.00.

Gold Prices Dip on Macron Win, Crude Oil Still Looks Vulnerable

Chart combined regulating TradingView

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

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