Gold Prices May Continue to Fall After Largest Drop in 2 Months

Talking Points:

  • Gold prices might continue to tumble as UK, US acceleration numbers rise
  • Crude oil prices demeanour to OPEC, EIA and API reports for instruction
  • What do sell traders’ bets contend about bullion trends? Find out here

Gold prices plunged as a market-wide liberation in risk ardour sent collateral flows pouring out of a reserve of Treasury bonds, pulling yields ceiling alongside shares. The chipper mood further echoed in Fed rate travel expectations, with a priced-in 2017 process trail steepening and promulgation a US Dollar upward. Not surprisingly, this undermined a interest of non-interest-bearing and anti-fiat assets.

Looking ahead, UK CPI information is approaching to see a title on-year acceleration rate rising to 2.8 percent in August, a hair next a four-year high of 2.9 percent set in May. While markets are not awaiting a BOE to lift rates this year, prospects for tightening in 2018 have firmed recently. Firm cost enlargement information that reinforces this energetic might boost tellurian tightening bets, spiteful a yellow metal.

From there, US PPI enters a picture. Median forecasts see factory-gate cost enlargement posting a initial boost in 4 months to strike 2.5 percent, a tip given April. An outcome echoing extended alleviation in US news-flow over a past 3 months might give Fed tightening prospects another ceiling poke – a apocalyptic awaiting for changed metals – nonetheless follow-through might wait for CPI information due Thursday.

Crude oil prices paused to connect waste after pang a largest dump in 3 months on Friday. Separate monthly opinion reports from a EIA and OPEC are due in a hours forward while API will recover weekly register upsurge statistics. Taken together, these will surprise prospects for operative down a tellurian supply glut, an bid led by a cartel’s prolongation cut intrigue and equivalent by US output.

What are a marketplace fundamentals pushing long-term wanton oil cost trends? Find out here!

GOLD TECHNICAL ANALYSISGold prices valid incompetent to means a climb to 13-month highs as suspected, branch neatly reduce to post a largest dump given early July. From here, a daily tighten next a 1312.62-21.51 area (23.6% Fibonacci retracement, trend line) exposes a 1295.46-99.25 section (38.2% level, double top). Alternatively, a annulment behind above a 14.6% Fib during 1335.24 opens a doorway for a retest of a Sep 8 high during 1357.50.

Gold Prices May Continue to Fall After Largest Drop in 2 Months

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices are digesting waste after recoiling from trend line insurgency running them reduce given February. A pierce next support during 47.54, a 38.2% Fibonacci expansion, exposes a 50% turn during 46.98 anew. Alternatively, a pull behind above a 23.6% Fib during 48.25 paves a approach for another plea of 49.39 (September 6 high, trend line).

Gold Prices May Continue to Fall After Largest Drop in 2 Months

Chart combined regulating TradingView

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

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