Gold Prices Seesaw on Dovish ECB, Trade War Jitters May Resurface

GOLD CRUDE OIL TALKING POINTS:

  • Gold prices waver on ECB though destroy to find durability direction
  • Crude oil prices arise as Libya shutters dual trade terminals
  • G20 ardour ministers meet, trade wars competence lapse to focus

Gold prices shot to a top spin in a month after a ECB process announcement struck a decidedly dovish tone, as expected. Officials pronounced they will breeze down QE by year-end though this looked like an acknowledgment of defeat, not a stipulation of victory. President Draghi pronounced follow-on rate hikes will not come during slightest until a second half of 2019 and stressed a need for continued accommodation.

The markets were looking for a decidedly some-more hawkish outcome, so it seems frequency startling that a ECB’s shy tinge offering a lift to non-interest-bearing resources succinct by a yellow metal. Gains valid passing however as a together thrust in a Euro echoed as extended US Dollar strength around a bellwether EUR/USD sell rate. That undermined anti-fiat appeal, erasing many of gold’s gains for a day.

Crude oil prices edged adult for a second day. Saudi oil apportion Khalid Al-Falih talked adult prospects of a understanding on easing outlay quotas that will emerge form subsequent week’s OPEC+ meeting, though a downswing that followed was fast reversed. The upswing followed reports that shipments from dual of a largest ports in Libya were taken offline amid clashes between opposition forces.

US CONSUMER CONFIDENCE, G20 MEETING, TRADE WARS

Looking ahead, an uptick in US consumer confidence competence strengthen this week’s hawkish Fed process announcement, boosting rate travel expectations and promulgation bullion reduce as a greenback extends upward. A view sign from a University of Michigan is approaching to arise in Jun after dual months of moderation.

Meanwhile, wanton oil traders will spin their courtesy to a assembly of G20 ardour ministers in Argentina. The entertainment will put officials from Russia, Saudi Arabia, a US and Canada in a same room, that competence furnish some engaging title flow.

The former 3 countries seem to determine on a need for an outlay boost to move prices lower. The latter competence not be utterly so penetrating deliberation a high breakeven indicate for connect sands crude, that competence open adult another crevasse in already stretched US/Canada relations.

In fact, markets competence lapse to a theme of trade wars some-more broadly now that a week’s top-tier eventuality risk has passed. An adequate response to simmering tragedy on arrangement during final week’s G7 leaders’ limit is still pending. The US competence also trigger $50 billion in tariffs directed during China. That competence green risk appetite, pressuring wanton reduce alongside stocks. Gold has struggled to find direction in such episodes however.

Learn what other traders’ bullion buy/sell decisions contend about a cost trend!

GOLD TECHNICAL ANALYSIS

Gold prices are still bogged down during support set from Dec 2016. A daily tighten next a reduce firm during 1296.07 primarily exposes a May 21 low during 1282.27. Alternatively, a push above a 1302.97-07.32 area aims for a top firm of trend support (1313.70), followed by a draft rhythm indicate during 1323.60.

Gold cost draft - daily

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are contrast insurgency in a 66.22-67.36 overload area, with a mangle above it opening a doorway for a exam of a 68.64-69.53 zone. Alternatively, a annulment by support running a uptrend from Jun 2017 – now during 65.28 – paves a approach for a exam of a Apr 6 low 61.84.

Crude oil cost draft - daily

COMMODITY TRADING RESOURCES

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

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