Gold Prices Erase Syria-Linked Gains on Fed Rate Hike Bets

Talking Points:

  • Gold prices erase Syria-linked gains after US payrolls data
  • Crude oil prices strike 1-month high on supply intrusion fears
  • Fed Chair Yellen speech, G7 assembly in a spotlight ahead

Gold prices retreated from highs set in a arise of a warn US barb strike on Syria as a Mar set of US practice total stoked Fed rate travel speculation. The metal’s dump tracked inversely of a burst in Treasury bond yields and a steepening in a 2017 rates trail pragmatic in Fed Funds futures.

While a title payrolls benefit was distant smaller than economists expected, the jobless rate fell even as labor force appearance hold solid and salary acceleration remained nearby eight-year highs. On balance, traders seemed to review that as signaling a proceed of supposed “full employment” rather than something worrisome.

Meanwhile, crude oil prices continued to pull aloft as a deteriorating geopolitical backdrop fed fears about informal supply disruption. The WTI benchmark overwhelmed a top spin in a month even as Baker Hughes reported that a series of active US oil rigs strike a top spin given Aug 2015.

A debate from Fed Chair Janet Yellen is in concentration ahead. She is expected to echo a executive bank’s vigilant to continue lifting rates in 2017 and might even vigilance that change piece rebate might start before year-end. That might boost a US Dollar and import on bullion prices.

Geopolitics sojourn another pivotal care as US Secretary of State Rex Tillerson attends a assembly with his G7 counterparts. Comments hinting that a US is now prepared to join efforts to mislay Syrian personality Bashar al-Assad might boost informal instability concerns, pushing both bullion and wanton oil higher.

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GOLD TECHNICAL ANALYSISGold prices conspicuously recoiled from trend-defining insurgency in a 1263.87-65.66 area (February pitch high, trend line, 50% Fibonacci expansion). A spin reduce from here that breaches a 1241.20-49.01 area (former resistance, 38.2% Fib) exposes 1218.90, an rhythm indicate in play given mid-January. Alternatively, a pull by insurgency reliable on a daily shutting basement primarily targets a 61.8% spin during 1282.31.

Gold Prices Erase Syria-Linked Gains on Fed Rate Hike Bets

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices demeanour staid to continue aloft after shutting above insurgency during 52.04, a 38.2%Fibonacci expansion. The subsequent upside separator comes in during 53.57,the 50% level, with a serve pull over that exposing a 55.10-21 area (January 3 high, 61.8% Fib). Alternatively, a spin behind next 50.04 paves a approach for a retest of a 23.6% enlargement during 50.14.

Gold Prices Erase Syria-Linked Gains on Fed Rate Hike Bets

Chart combined regulating TradingView

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

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