Crude Oil Prices Rise With Stocks But Data May Disrupt Momentum

Crude oil prices continued to take their cues from broader market sentiment trends yesterday, with the WTI benchmark rising alongside the bellwether S&P 500 stock index. Investors’ mood brightened despite a worrying outcome in Italy’s general election, which the newswires attributed to comments from US House of Representatives Speaker Paul Ryan that sharply opposed President Trump’s proposed tariff hike.

Meanwhile, gold prices backtracked. The recovery in risk appetite pulled capital out of bonds and sent yields correspondingly higher, undermining the appeal of non-interest-bearing assets. The metal erased earlier gains scored amid worries about a US-triggered trade war and Italian politics, finishing the day with a mild loss but ultimately staying within the narrow range prevailing since the middle of last week.

Looking ahead, API inventory flow statistics are due and will be sized up against forecasts calling for a 1.7 million barrel build to be reported in official statistics due Wednesday. An updated EIA short-term energy outlook is also due. Taken together, the two releases may decouple oil from broader risk trends, if only briefly. Meanwhile, gold will look to incoming Fed commentary to for clues of deepening hawkish consensus.

GOLD TECHNICAL ANALYSIS

Gold prices failed to sustain a push above near-term trend line resistance, retreating back toward support in the 1312.36-16.50 area (range floor, 38.2% Fibonacci retracement). A daily close below this barrier exposes the 50% level at 1301.19. Alternatively, another foray to the upside that manages to clear the 23.6% Fibonacci expansion at 1333.51 targets the 38.2% threshold at 1352.40 next.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices bounced to retest resistance marked by a chart inflection point at 62.62. A daily close above that opens the door for another challenge of the February 26 high at 64.21. Alternatively, a turn back downward that takes prices below the 38.2% Fibonacci expansion at 60.96 sees the next downside barrier marked by the 50% level at 59.95.