Gold Prices May Resume Advance on French Election Jitters

Talking Points:

  • Gold prices shelter from 5-month high as Fed rate travel bets stabilize
  • US Dollar gains put de-facto downward vigour on wanton oil prices
  • Worries about French choosing competence green market-wide risk sentiment

A disturbed tinge during a open of a trade week valid passing as Wall Street returned online after a Easter holiday. Gold prices topsy-turvy from intraday gains as recuperating view weighed opposite Treasury holds and bid adult yields, boosting a US Dollar along a way. Not surprisingly, this undermined support for non-interest-bearing and anti-fiat assets.

Tellingly, financials led US shares upward. An index tracking a sector’s illustration within a SP 500 closely parallels a 2017 rate travel opinion pragmatic in Fed Funds futures. This speaks to expectations of continued tightening even amid first-quarter slack fears, nonetheless a hawks’ merriment has waned somewhat. The luck of a Jun travel is 50.2 percent now, down from 63.2 percent final week.

Crude oil prices seemed to get held adult in macro-level collateral flows, with a USD-denominated Brent and WTI benchmarks descending as a greenback found a lifeline. The monthly EIA Drilling Productivity report competence have compounded downward pressure. It pronounced US shale outlay will strike 5.2 b/d in May, a top given Nov 2015, and upgraded a Apr foresee to 5.1 b/d from 4.96 b/d projected previously.

The information calendar is comparatively still from here, with API register figures during a forefront. Familiarly hawkish comments from Kansas City Fed President Esther George should not be quite startling and so competence pass with small fanfare. On balance, that is expected to keep broad-based view trends in control, quite as market-wide liquidity levels reconstruct with a lapse of European participation.

Worries about a French presidential election competence green view anew. First-round voting starts on Apr 23 and heading possibilities are clustered nearby 20 percent in a polls, creation for scarcely high doubt about who will make it into a final face-to-face contest. This fuels fears that right and left extremes Marine Le Pen and Jean-Luc Melenchon, conjunction of that excite a markets, competence be a final left standing.

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GOLD TECHNICAL ANALYSISGold prices retreated after touching a top turn in 5 months. Support is noted by a 61.8% Fibonacci enlargement during 1282.31, with a pierce next that exposing a 1263.87-65.66 area (50% level, Feb 27 high). Alternatively, a pull above insurgency in a 1302.90-08.00 section (76.4% Fib, former support) targets a 100% enlargement during 1336.19.

Gold Prices May Resume Advance on French Election Jitters

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continue to symbol time next a $54/bbl figure. A daily tighten next support during 52.04, a 38.2% Fibonacci expansion, exposesthe 23.6% turn during 50.14. Alternatively, a pull above a 50% Fibat 53.57 targets a 55.10-21 area (January 3 high, 61.8% expansion).

Gold Prices May Resume Advance on French Election Jitters

Chart combined regulating TradingView

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

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