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    Gold Price Rise May Extend But Signs of Exhaustion Are Emerging

    Abstract:Gold prices may continue inching upward but technical cues pointing to ebbing momentum are warning of a possible pullback before the broader rise resumes.
    Crude

      Crude oil, gold price performance chart created using TradingView

      GOLD & CRUDE OIL TALKING POINTS:

    •   Gold prices may rise as markets tilt risk-off before the weekend

    •   Crude oil prices vulnerable, might move to retest $50/bbl figure

    •   Progress may be limited before FOMC minutes, Jackson Hole

      Commodity prices idled Thursday as a lull in pace-setting news flow made room to digest recent volatility. From here, a relatively quiet offering on the economic data docket seems likely to keep broad-based market sentiment trends in control. The path of least resistance favors a risk-off scenario.

      Sudden bursts of volatility have become increasingly common recently as prices react to eye-catching headlines from Washington and Beijing amid US-China trade war escalation. This probably has traders more leery than usual of holding pro-risk exposure over the weekend.

      With that in mind, a round of defensive liquidation might pull down cycle-sensitive crude oil prices alongside stocks. A parallel dip in bond yields might have scope to push up gold, especially since the metal has managed gains even as the US Dollar trades higher recently.

      Absent a burst of headline-driven volatility however, significant trend development seems unlikely. The week ahead brings critical inflection points in the Fed policy outlook – a defining macro input – by way of FOMC minutes and the Jackson Hole symposium. Commitment may be scarce in the interim.

      GOLD TECHNICAL ANALYSIS

      Gold prices are inching toward resistance at 1540.70, the 76.4% Fibonacci expansion. A daily close above that exposes a weekly chart inflection level at 1563.00 next. Negative RSI divergence hints upside momentum is ebbing however. A turn below the 61.8% Fib at 1513.94 targets the 50% level at 1492.31.

    Gold

      Gold price chart created using TradingView

      CRUDE OIL TECHNICAL ANALYSIS

      Crude oil prices slipped back below the lower bound of the 54.72-56.09 congestion area, breaking the weekly uptrend in the process. Sellers may now move test the 49.41-50.60 zone anew. A daily close above trend resistance set from late April – now at 58.53 – seems necessary to neutralize downward pressure.

    Crude

      Crude oil price chart created using TradingView

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