CRUDE OIL & GOLD TALKING POINTS:
Crude oil costs drop to a 13-month low as oversupply fears reemerge
Gold costs fall as firming Fed view boosts yields regardless of danger aversion
EIA stock knowledge echoing API forecast would possibly provide crude oil a lifeline
Crude oil costs swooned as international oversupply fears returned. The drop adopted a report from S&P International Platts saying China’s crude inventories quadrupled in October. It added additional construct is probably going in November as demand wanes. Doubts concerning the efficiency of additional OPEC provide cuts have been already swirling, with the massive restocking by the world’s second-largest oil shopper seemingly pushing costs over the sting.
The plunge spilled over into broader danger aversion, with energy-linked names main Wall Road to its largest one-day drop in a month. Rebuilding Fed fee hike expectations appeared to compound the selloff. In reality, Treasury bond yields and the US Greenback rose regardless of the risk-off temper because the 2019 tightening path implied in Fed Funds futures steepened. Not surprisingly, anti-fiat gold costs fell towards this backdrop.
CRUDE OIL PRICES MAY BOUNCE ON EIA INVENTORY DATA
Trying forward, crude oil costs might discover some room to get better if EIA stock movement statistics echo a forecast from API projecting a slender 1.55 million barrel outflow. An identical final result in official figures would distinction sharply with forecasts calling for a 2.87 million barrel construct. As for gold costs, the near-term outlook is considerably clouded.
S&P 500 futures are pointing increased, hinting at a risk-on temper that may be anticipated to buoy yields and weigh on the yellow steel. Yesterday’s efficiency warns towards assuming such issues nonetheless. If worries about an aggressive Fed have been not less than partly accountable for that selloff, a pre-holiday correction might convey the reverse – an uptick alongside share costs. In any case, substantive pattern growth appears unlikely.
See our information to be taught concerning the long-term forces driving crude oil costs!
GOLD TECHNICAL ANALYSIS
Gold costs snapped a five-day successful streak, recoiling kind a check of pattern line resistance set from late October. A reversal under assist within the 1211.05-14.30 space exposes rising pattern assist, now proper on the $1200/ozfigure. Alternatively, a push above resistance – now at 1228.11 – opens the door for a problem of the 1260.80-66.44 zone.
CRUDE OIL TECHNICAL ANALYSIS
Crude oil costs crashed via assist within the 54.48-55.21 space to problem the subsequent draw back barrier within the 52.34-83 zone subsequent. A day by day shut under that exposes the October 2017 low at 49.16. Alternatively, a transfer again above 55.21 paves the best way for a retest of 58.11, the February 9 low.
COMMODITY TRADING RESOURCES
— Written by Ilya Spivak, Forex Strategist for DailyFX.com
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