Crude oil prices continued to move in lockstep with broader risk appetite trends, with a gap higher at the weekly trading open failing to find follow-through as sentiment soured. The S&P 500 stock index traded lower and the WTI benchmark followed.
Investors might have rethought Friday’s exuberance. That was driven by hopes that a Senate budget resolution would pave the way for an economic growth pickup fueled by tax cuts. Perhaps they were reminded of the Trump administration’s struggle to legislate despite Republicans’ Congressional majority.
Tellingly, gold prices turned higher while front-end US Treasury bond yields declined and the US Dollar retreated. This seemed to reinforce the sense that souring “Trump trade” prospects accounted for the overall tone across benchmark asset classes over the past 24 hours.
Baseline fundamentals may re-take the spotlight tin the day ahead as October’s US PMI data roundup as well as API crude oil inventory flow statistics hit the wires. An upbeat print on the former may rekindle Fed rate hike speculation. The latter will be judged against bets on a 2.45 million barrel drawdown.
GOLD TECHNICAL ANALYSIS – Gold prices continue to hover in a consolidation range between the October 19 low at 1276.31 and the following day’s high at 1291.06. A break upward exposes the 50% Fibonacci retracementat 1309.15. Alternatively, a push below support targets the 38.2% Fib expansion at 1269.10.
Chart created using TradingView
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices are still looking for direction below resistance in the 52.86-53.23 area (September 28 high, 38.2% Fibonacci expansion). Breaking this barrier on a daily closing basis sees the next upside barrier at 54.51, the 50% level. Alternatively, a move below rising trend line support at 50.66 opens the door for a retest of 49.10, the October 6 low.
