Crude oil prices continue to mark time in familiar territory. A larger-than-expected inventory build reported by the EIA applied a bit of selling pressure but failed to push prices out of recent ranges. The data showed stockpiles added 2.84 million barrels last week, much more than the 1.47mb gain projected by economists.
Gold prices declined as US Treasury bond yields shot higher against a broadly risk-on backdrop, dampening demand for non-interest-bearing assets. Follow-through is hardly assured however as Trump-watching investors struggle to pin down a baseline narrative for the likely impact of on-coming fiscal policy changes.
With this in mind, markets will probably look beyond a smattering of second-tier US economic data as traders continue to keep a watchful eye on anything pertinent coming out of the White House. Kneejerk volatility can be triggered by a formal announcement and a stray tweet alike.
GOLD TECHNICAL ANALYSIS – Gold prices are turning lower as expected after producing a bearish Dark Cloud Cover candlestick pattern coupled with negative RSI divergence. A daily close below 1199.80 initially exposes the 14.6% Fibonacci expansion at 1183.28. Alternatively, a turn back above the 38.2% Fib retracement at 1219.20 targets the 1248.98-50.65 area (50% level, June 24 low).
CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices are struggling to make good on a bearish Head and Shoulders (H&S)chart pattern but the setup may yet work out. A daily close below 52.44 opens the door for a challenge of the 50.25-69 area (38.2% Fibonacci retracement, January 10 low), with a break confirmed on a daily closing basis confirming H&S structure. Alternatively, a push above the 23.6% Fib expansion at 53.75 targets the 55.21-65 region (January 3 high, 38.2% expansion).
