Brace for a Correction in Gold, Crude Oil Prices on Pre-Positioning for FOMC

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Brace for a Correction in Gold, Crude Oil Prices on Pre-Positioning for FOMC

Brace for a Correction in Gold, Crude Oil Prices on Pre-Positioning for FOMC

Talking Points:

  • Crude oil draft setup hints a tip might be combining subsequent $52/bbl
  • Gold prices arise to 3-week high, clearly exposing May high
  • Corrective flows might bode ill for line into a week-end

Crude oil prices declined alongside a SP 500 as risk ardour malleable opposite a financial markets. Souring view might simulate pre-positioning forward of subsequent week’s manly news-flow – notably, a FOMC rate preference – with traders regulating a peace in high-profile eventuality risk to book increase and pierce toward a some-more neutral posture. The defensive mood carried over into Asian hours and looks set to continue into a final hour of trade week as batch index futures corner carefully lower.

A broadly visual tinge might also bode ill for gold prices after a steel strike a tip turn in 3 weeks. The pierce played out inversely of a pointy dump in front-end breakeven rates, a magnitude of priced-in acceleration expectations subsequent from a disproportion in favoured and genuine bond yields. This energetic might indicate that traders interpreted softening price-growth bets as hinting during a dovish Fed outlook, boosting a relations interest of non-interest-bearing assets.

GOLD TECHNICAL ANALYSISGold prices seem staid to exam May pitch highs after violation trend line insurgency capping gains over a past month. A mangle above a 1297.14-1303.62 area noted by a 38.2% Fibonacci enlargement and a May 2 high exposes a 50% turn during 1327.29. Alternatively, a pierce behind subsequent a 23.6% Fib during 1259.84 targets a 14.6% enlargement during 1236.85.

Gold, Crude Oil Prices May Fall on Pre-Positioning for FOMC

CRUDE OIL TECHNICAL ANALYSISCrude oil prices put in a Bearish Engulfing candlestick pattern, hinting a tip might be holding figure subsequent a $52/barrel figure. A daily tighten subsequent a intersection of a rising trend line and a 61.8% Fibonacci enlargement during 50.13 exposes a 50% turn during 48.77. Alternatively, a pull above a 76.4% Fib during 51.82 targets a 100% enlargement during 54.54.

Gold, Crude Oil Prices May Fall on Pre-Positioning for FOMC

 

Courtesy: Ilya Spivak

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