CRUDE OIL & GOLD TALKING POINTS:

Crude oil prices vulnerable as markets fret about slowing global growth

IMF outlook update, ECB rate decision, US GDP may fuel risk aversion

Gold prices may struggle to build higher as haven flows buoy US Dollar

Corrective moves marked Friday’s price action for marquee commodities, as expected. Crude oil prices edged cautiously higher while gold recoiled downward, retracing all of Thursday’s Fed-inspired rally. Directional progress may remain elusive at the start of the new trading week as investors withhold conviction ahead of heavy-duty event risk in the days ahead.

Markets will probably have to contend with downbeat guidance from the IMF and the ECB, with second-quarter US GDP data lining up as confirmation. Economists are penciling in the weakest growth in three years. Incoming corporate earnings reports may likewise sound alarming. Meanwhile, support from dovish Fed commentary will not be on the menu as officials go dark ahead of next week’s FOMC meeting.

Crude oil prices may fall amid de-risking in such a scenario. Indeed, it could be telling that they have been unable to mount a lasting rally even as saber-rattling voices in Washington DC and Tehran appear to grow louder. Gold may weaken too if markets have truly run out of scope to price in further Fed stimulus even has haven demand puts a premium on the unrivaled liquidity of the US Dollar.

Get the latest gold and crude oil forecasts to see what will drive prices in the third quarter!

GOLD TECHNICAL ANALYSIS

Gold prices put in a Bearish Engulfing candlestick pattern, hinting a top may be taking shape. Negative RSI divergence bolsters the case for a downturn. A daily close below rising trend line support at 1399.25 initially exposes the July 1 low at 1381.91. Alternatively, a break above the 38.2% Fibonacci expansion at 1447.89 targets the 50% level at 1468.27 next.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are still probing support at 54.84. A daily close above below this barrier initially sets the stage to challenge the 49.41-50.60 zone. Alternatively, a reversal back above resistance at 58.19 might set open the way to retest the 60.04-84 region anew.

COMMODITY TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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