Gold Prices Attempt Bounce, Follow-Through Depends On US Data

Gold prices are attempting an intraday recovery alongside a pullback in the US Dollar in a move that seems to reflect moderating Fed rate hike bets. Follow-through is far from secure however as the Fed’s preferred PCE inflation gauge crosses the wires.

The core year-on-year inflation rate is expected to remain unchanged at 1.6 percent. A recent run of better-than-expected economic releases hints analysts’ models may be underestimating performance however, opening the door for an upside surprise. Such an outcome is likely to boost near-term tightening speculation, sending the greenback higher and pressuring the yellow metal.

The data’s implications for sentiment-linked crude oil prices is unclear considering the resilience of risk appetite in the face of the hawkish shift in the priced-in Fed policy outlook since the beginning of the month. S&P 500 futures are pointing higher, hinting at a risk-on mood that may bode well for the WTI contract. Still, as noted yesterday, pre-positioning for this week’s OPEC meeting may emerge as a headwind.

GOLD TECHNICAL ANALYSIS – Gold prices are attempting to launch a rebound after posting the ninth consecutive daily loss. A push above channel floor support-turned-resistance at 1231.48 targets the 23.6% Fibonacci retracementat 1242.88. Alternatively, a drop through support at 1205.30, the 38.2% level, paves the way for a test of the 50% Fibat 1174.93.

CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices are locked in quiet consolidation near the $50/barrel figure but negative RSI divergence continues to hint a top may be taking shape. Near-term support is at 48.77, the 50%Fibonacci expansion, with a break below that exposing the 38.2%level at 47.41. Alternatively, a push above the 61.8% Fib at 50.13 targets the 76.4%expansion at 51.82.