POINTS OF DISCUSSION OF OIL GOLDEN AND RAW:
- Gold prices soar at Fed, but technical setup warns over crowding
- Crude oil prices rise as Russia and Saudi Arabia pledge to continue their cooperation
- FOMC minutes and API inventory data are available, trade war information becomes generic
Gold Prices have skyrocketed, with dovish comments from Cleveland Fed President Loretta Mester lowering the US dollar alongside benchmark Treasury bond yields. This has given a familiar boost to the anti-fiat and non-interest bearing assets summarized by the yellow metal.
Mester, who is generally bent over the hawk, said she was comfortable with slowing down or stalling the Fed's balance sheet in 2019. She added that this so-called "quantitative tightening" may have occurred. complete without diminution. This is quite different from the previously invisible background standardization announced earlier.
Crude oil Prices fell briefly, as did the Fed's dubious speeches that fueled fears of a global slowdown (presumably the rationale behind the defensive pivot of policy makers in recent months). A rapid recovery however followed the announcement of the new Russia and Saudi Arabia will continue to coordinate procurement efforts.
The Kremlin said Russian President Vladimir Putin and Saudi King Salman Bin Abdulaziz had declared "ready to continue coordination" after a telephone conversation on Tuesday. This may have stimulated bets on deeper production cuts to push up prices while US output continues to inflate as demand stabilizes.
FOMC MINUTES AND API DATA, TRADE WAR NEWS IN WILDCARD
Look forward, minutes from the January FOMC meeting are in focus. Statements and statements following this conclave marked a palpable withdrawal of the muscular and hawkish rhetoric that dominated the official statements in 2018. A little more of the same thing in the Minutes document could help gold to continue to the rise.
Meanwhile, the oil eyeing Weekly API inventory feed data. The release will be compared to forecasts for a production of 2.54 million barrels which should be reported in the official EIA figures on Wednesday. If API reports a smaller entry, prices may increase.
News shapes the world trade war prospects remains an important joker. On the one hand, favorable statements have surrounded the ongoing negotiations between the United States and China. On the other hand, the threat of a imminent increase in motor vehicle import tariffs is far from trivial.
Learn what buying and selling decisions of other traders tell about the price trend!
TECHNICAL ANALYSIS GOLD
Gold prices broke through resistance at 13:26, the highest on January 31, revealing the defining peak in the 1357.50 to 66.06 range. The negative RSI divergence always warns against a positive slowdown, suggesting however that a lower turn is not far behind. A return below 1326.30 – now a support now – opens the way for another test of the support of the trend line at 1306.89.
TECHNICAL ANALYSIS OF GROSS OIL
Crude oil prices are coming close to resistance in the 57.96-59.05 zone. A daily close above that opens the door to a new test of trend line support turned resistance from February 2016, now at 61.67. Alternatively, a return below the February 4th peak at 55.75 resets the support shelf in the 50.15 to 51.33 area.
COMMERCIAL RESOURCES ON GOODS
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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