Cycle-sensitive crude oil prices reveled in a broadly risk environment, with the US-based WTI contract tracking S&P 500 futures higher for much of the day. The advance fizzled however after the international Brent crude benchmark touched the psychologically significant $70/barrel figure for the first time since December 2014. That seemed to trigger profit-taking, bringing prices broadly lower.
Gold prices advanced, buoyed by a weaker US Dollar in the wake of disappointing PPI data. The higher-profile CPI inflation gauge as well as the retail sales report are now in focus. Softer results echoing recently disappointing US news-flow may cool near-term Fed rate hike bets, pushing the yellow metal further upward. Markets now price the probability of tightening in March at 82 percent.
GOLD TECHNICAL ANALYSIS – Gold prices continue to oscillate in a choppy range above the $1300/oz figure, with negative RSI divergence warning that downturn may be brewing ahead. A break below the 61.8% Fibonacci retracement as 1311.34 confirmed on a daily closing basis opens the door for a retest of 1297.08, the 50% level. Alternatively, a breach above the 76.4% Fib at 1328.98 targets the September 8 high at 1357.50.
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices produced a Shooting Star candlestick below resistance at 64.32, the 50% Fibonacci expansion. The setup hints at indecision and may precede a reversal downward. A move below the 38.2%Fibonacci expansion at 62.31 paves the way for another challenge of the 23.6% level at 59.83. Alternatively, a push above the 50% Fib at 64.32 exposes the 61.8% expansion at 66.33.
