The price of crude oil and gold may fall, the minute before the FOMC prompting the Fed to rethink

POINTS FOR DISCUSSION WITH RAW OIL AND GOLD:

• Crude Oil Prices Down on OPEC + Prospects for Reduced Production, EIA Data
• Gold prices rise as markets find dictionaries dotted by Fed's Powell
• November FOMC minutes may prompt rethinking of Fed's rate hike outlook

Crude oil Prices fell after Saudi Energy Minister Khalid Al-Falih said his country would not act alone to stabilize the market, while Russian President Putin said the prices at $ 60 per barrel is "absolutely good", suggesting that Riyadh may have trouble convincing Moscow. coordinated production reduction at the next OPEC meeting on December 6.

The WTI contract had a brief rebound following the fall of the US dollar following comments by Fed Chairman Jerome Powell that traders interpreted as dovishbut the sales pressure has returned quickly. This seems to have reflected EI data showing that inventories rose by 3.58 million barrels last week, exceeding forecasts calling for a small increase of 590.1 kilograms.

Gold however, prices had little trouble taking advantage of the softening of the greenback, moving higher when the benchmark currency fell in line with Treasury yields and a softening of the expected 2019 rate hike outlook implied in the US dollar. Fed Funds Futures, fueling the demand for negative and non-carrying interest rates. badets. The rally visibly failed to overcome resistance in the short term (see chart below).

FOMC MINUTES CAN STRENGTHEN THE AMERICAN DOLLAR

Minutes of November FOMC meeting now enter the spotlight. The policy statement from the meeting seemed resolutely optimistic. A similar tone in this release may require rethinking investors' reading of what Mr. Powell said yesterday. This could inspire a recovery in the US dollar, exerting pressure on gold and crude oil prices.

Markets seemed to be sticking to the characterization of current rates by the presidency, which was "just below" the neutral range, where the policy is neither stimulating nor restrictive. This range is quite wide, between 2.5 and 3.5%. If we take the 3% median line as a reference, this means that the term "neutral" is around 75-100 basis points, which is quite in line with the Fed's September forecast. It hardly looks like a dovish pivot.

Learn what gold buying / selling decisions of other traders tell about the price trend!

TECHNICAL ANALYSIS GOLD

Gold prices remain stuck between a downward trend line set from the end of October and a support in the area between 1211.05 and 14.30. A daily close above the resistance – now at 12.258.88 – opens the door for a test of 1235.24-41.64. Alternatively, a movement across the support as well as an upward trend line at 1203.28 expose the floor of the range in the region 1180.86-87.83.

TECHNICAL ANALYSIS OF GROSS OIL

Crude oil prices continue to consolidate below resistance in the 52.10-83 zone. The appearance of a positive RSI divergence points to a rebound, with an upward break confirmed on a daily close basis, exposing the zone from 54.48 to 55.21. Otherwise, a breach below the lowest of October 2017at 49.16 targets on August 31, 2017 bottom at 45.62.

COMMERCIAL RESOURCES ON GOODS

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

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