Gold Prices Snap Losing Streak, May Extend Gains on Risk Aversion

Talking Points:

  • Gold prices snapped a longest losing strain in 7 months
  • Yields dump in risk-off trade competence assistance extend a rebound
  • Crude oil prices rose even as OPEC foresaw supply swell

Gold prices edged, gnawing a longest losing strain given Oct 2016. Treasury yields declined as bonds fell and collateral fled to a reserve of supervision debt, boosting a relations interest of non-interest-bearing resources including a yellow metal.

Crude oil prices continued to corner adult even as OPEC concurred a plea to a prolongation cut intrigue acted by flourishing pitch supply. The conglomeration revised a 2017 projection for non-member outlay by a vast 64 percent to 950k b/d.

A weaker US Dollar competence have accounted for crude’s gains. The greenback purebred a initial decrease in 5 sessions and a largest in a month. That competence have offering de-facto support to oil prices denominated in terms of a benchmark banking on tellurian markets.

Looking ahead, a vast dollop of top-tier US mercantile data competence pass though fireworks. CPI, sell sales and consumer certainty statistics are all due to cranky a wires. Their singular implications for Fed process bets now that a Jun rate travel is entirely labelled in competence sack them of market-moving potential.

Baker Hughes supply count figures are also on tap. The series of active US oil descent points has increasing for 16 uninterrupted weeks however, so another uptick will substantially pass for standing quo unless a boost is scarcely vast (greater than 18, say). An out-of-character decrease will also authority attention.

On balance, this competence see view trends browbeat a spotlight once again. Shares declined in Asia and SP 500 futures are indicating downward, hinting that some-more of a same competence be in store by a week-end. That competence interpret into bullion gains as yields tumble though a implications for wanton oil are as nonetheless unclear.

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GOLD TECHNICAL ANALYSISGold prices put in a bullish Morning Star candlestick pattern, hinting a rebound competence be ahead. A daily tighten abovesupport-turned-resistance during 1241.50 sees a subsequent upside separator during 1258.62, a 14.6% Fibonacci expansion. Alternatively, a pull next rhythm indicate support during 1217.70 exposes a 38.2% turn during 1199.07.

Gold Prices Snap Losing Streak, May Extend Gains on Risk Aversion

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continued to pull higher, clearing insurgency during 47.59 noted by a 38.2% Fibonacci retracement. From here, a daily tighten above a 50% turn during 48.77 targets trend line support-turned-resistance during 49.29, followed by a 61.8% Fib during 49.94. Alternatively, a annulment behind next 47.59 opens a doorway for a retest of a 23.6% enlargement during 46.14.

Gold Prices Snap Losing Streak, May Extend Gains on Risk Aversion

Chart combined regulating TradingView

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

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