GOLD & CRUDE OIL TALKING POINTS:

Gold prices down as White House waters down China import tariff hike

Crude oil prices gain in risk-on trade but trend resistance still in place

Soft German GDP data may revive global slowdown fears, EIA data due

Gold prices ended a volatile day with a loss as the White House watered down planned tariff hikes on Chinese imports. That buoyed risk appetite, sending bond yields higher alongside stocks and crude oil prices. China responded approvingly, fixing the Yuan higher and confirming it will show up for next month’s trade talks.

SOFT GERMAN GDP DATA MAY REKINDLE GLOBAL SLOWDOWN WORRIES

German GDP figures are in the spotlight from here. Output in the Eurozone’s largest economy is expected to have shrunk 0.1 percent in the second quarter. Regional data has increasingly undershot forecasts lately, opening the door for a still-weaker outcome.

This may revive global slowdown fears and sour risk appetite anew, putting gold back on offense. Upside progression may be limited if haven demand buoys the US Dollar however. Crude oil prices might face selling pressure in the meanwhile.

The bears’ resolve may be bolstered if official EIA inventory data echoes yesterday’s API projection signaling stockpiles added 3.7 million barrels last week. That would mark substantive disappointment relative to baseline projections envisioning a 2.19-million-barrel outflow.

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GOLD TECHNICAL ANALYSIS

Negative RSI divergence below resistance marked by the 61.8% Fibonacci expansion at 1513.94 hints gold prices may be topping. A break back below the 50% level at 1492.31 initially targets the 38.2% Fib at 1470.68. Alternatively, a daily close above 1513.94 exposes the 76.4% expansion at 1540.70 next.

Gold price chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices moved back above the 54.72-56.09 congestion zone, menacing trend line resistance capping the upside since late May (now at 58.71). A daily close above that aims for the 60.04-84 area next. Alternatively, a reversal back below 54.72 opens the door for a retest of the 49.41-50.60 region.

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