Gold Prices May Decline as Fed Officials Talk Up Rate Hikes

Talking Points:

  • Gold prices stall after rising to a three-week high
  • Upbeat Fed commentary may trigger a turn lower
  • Crude oil prices rise with OPEC meeting in focus

Gold prices edged higher on Friday in a move that seemed corrective after the metal suffered its largest drawdown in two weeks in the preceding session. The spotlight now turns to a busy docket of scheduled commentary from Fed officials.

Comments from Governor Lael Brainard as well as Philadelphia and Minneapolis branch presidents Patrick Harker and Neel Kashkari are due to cross the wires. Rhetoric suggesting the central bank remains on track to raise rates next month despite recent US political jitters may weigh on gold. 

Crude oil prices continued to push upward even as Baker Hughes reported that the number of active US extraction rigs increased again last week. That seemed to reflect hopes that an OPEC-led production cut effort set to expire mid-year will be extended when the cartel and its allies meet later this week.

Russia and Saudi Arabia favor keeping the scheme in place through the first quarter of next year and many of the relevant parties have already voiced their support. That suggests prices may largely reflect a prolonged arrangement at this stage, robbing the actual announcement of market-moving potential.

In the meantime, speculation may continue to keep oil relatively well-supported, although upward momentum might slow somewhat. Prices may be asymmetrically sensitive to news-flow suggesting the pro-cuts consensus is not as strong as markets hope however. Such a headline might produce significant liquidation.

What do retail traders buy/sell decisions say about crude oil and gold price trends? Find out here!

GOLD TECHNICAL ANALYSIS – Gold prices are digesting gains after testing resistance in the 1256.74-63.87 area, which has variously acted as support and resistance since late February. A break higher on a daily closing basis exposes trend line resistance at 1280.51. Alternatively, a reversal back below the 23.6% Fibonacci expansion at 1235.91 targets an upward-sloping support line at 1219.23.

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices continue to push upward, rising to the highest level in a month. From here, a daily close above the 61.8% Fibonacci retracement at 50.85 opens the door for a test of the 76.4% level at 52.51. Alternatively, a reversal back below the 50% Fib at 49.50 exposes the the 38.2% retracement at 48.15 anew.

Chart created using TradingView   

By Ilya Spivak,

Source:- DailyFX

FTSE 100 Tech Outlook: Trading Between Key Lines o...
Latvia Jobless Rate Rises Slightly In Q1

Related Posts



No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Saturday, 25 May 2019

Latest Spot Rate

25 May 2019
One word perfectly sums up the events of this week. Disappointing.  For some it began with the uninspiring conclusion of Game of Thrones, long-term stock investors grimaced at the lack of progress with the US-China trade war, and FX traders will see ...
25 May 2019
Oil prices were steady on Friday ahead of long U.S. and UK holiday weekends, but were on track for its biggest weekly drop of the year, pressured by rising inventories and concern over an economic slowdown.Brent crude rose 12 cents to $67.88 a barrel...
25 May 2019
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global econ...
24 May 2019
Composite PMI slumps to three-year low in MayFurther signs of manufacturing weakness spreading toservicesSmallest jobs gains for over two yearsPrice pressures fall sharplyEarnings under greatest stress since 2009Growth of US business activity slowed ...
24 May 2019
Question phrasing can be key to explaining surveydivergencesCBI survey seen to lag PMI as surveys differ in monitoringlevels and flowsSubjective gauges can be an additional source of variation intime seriesDifferences in survey methodology can cause ...
How It Works | About | Contact | Privacy Policy | Forex Marketing
© 2009 - 2019 Forex Forum. All Rights Reserved. Risk Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.