Crude oil, gold price performance chart created using TradingView

CRUDE OIL TALKING POINTS:

Crude oil prices rise as China assures foreign firms amid US trade war

Gold prices retreat but jittery market mood likely to limit the downside

Risk-off bias will probably prevail as markets try to avoid headline risk

Crude oil prices rose alongside stocks as markets cheered assurances from China that it won’t discriminate against or crack down on foreign companies amid trade war escalation. The remarks were delivered by MOFCOM spokesman Geo Feng.

The risk-on tilt drove bond yields upward and undermined the appeal of non-interest-bearing assets, pushing gold prices downward. Revised US GDP data nudged the US Dollar higher, compounding pressure on the yellow metal. It showed consumption – the largest growth contributor – expanded faster than expected.

CRUDE OIL MAY BACKTRACK AS GOLD GAINS BEFORE THE WEEKEND

Financial markets are sending conflicting cues about what is likely to transpire in the hours ahead. In the G10 FX space, the anti-risk Japanese Yen is outperforming while the sentiment-linked Australian and NewZealand Dollars are suffering outsized losses. That points to a defensive bias.

Meanwhile, bellwether S&P 500 stock index futures are pointing upward, suggesting risk appetite might hold up through the weekly close. True trend development in this direction seems unlikely however, with traders probably too leery of “Tweetstorm volatility” to carry much risk-on exposure through the weekend.

With that in mind, currency markets probably have it right. That means the path of least resistance points lower for crude oil prices while gold might recover a bit of lost ground. The Fed’s favored PCE inflation gauge headline the data docket, with the core rate expected to hold steady at 1.6 percent on-year.

Get our free guide to help build confidence in your gold and crude oil trading strategy!

GOLD TECHNICAL ANALYSIS

Gold prices pulled back to near-term support at 1524.10. A daily close below this would break the near-term uptrend, exposing 1480.00 next. Negative RSI divergence bolsters the case for topping. Critical resistance continues to be marked by a weekly chart inflection level at 1563.00.

Gold price chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are pushing up against trend resistance set from late April. A daily close above its upper layer – now at 57.59 – exposes the 60.04-84 area. Alternatively, a turn downward that clears the August 26 low at 52.96 sets the stage for a challenge of long-standing support clustered near the $50/bbl figure.

Crude oil price chart created using TradingView

COMMODITY TRADING RESOURCES

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

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter