Crude oil, gold price performance chart created using TradingView

CRUDE OIL & GOLD TALKING POINTS:

Crude oil prices rise as Iran rebuffs Trump overture, inventories surge

Gold prices edge past resistance, might move to test six-year resistance

Political instability, trade war jitters may cap any pro-risk price moves

Crude oil prices broke with an otherwise defensive mood on global financial markets, scoring the largest daily increase in a week. OPEC+ producers said they expect to deplete the surplus in global stockpiles in the second half of the year, Iran rebuffed an olive branch from US President Trump – saying sanctions must be eased to commence talks – and API data showed inventories shed 11.1 million barrels last week.

Gold prices were pulled into broader risk-off dynamics however. The epitome for non-interest-bearing assets found relative support as bond yields fell. The mood around financial markets soured as China cast doubt on reports that it initiated a reboot of trade negotiations with the US while recession fears were stoked by a deeper inversion of the Treasuries yield curve.

CRUDE OIL PRICES MAY STRUGGLE TO RISE IN BROADLY JITTERY MARKETS

Looking ahead, a quiet day on the economic data front is likely to put sentiment trends back at the forefront. Bellwether S&P 500 futures are pointing higher to suggest a cautiously risk-on tilt, but durable follow-through in this direction seems inherently unlikely considering the extent of vulnerability to headline risk endemic to the current environment.

Indeed, a stray comment from either Washington or Beijing fanning the flames of trade war, a tense exchange between the White House and officials in Tehran, or an unexpected outturn in the Brexit saga might spoil the mood at a moment’s notice. This means that investors are probably more defensive in general, diminishing scope for any substantive pro-risk trend development as a matter of course.

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

GOLD TECHNICAL ANALYSIS

Gold prices pushed through resistance marked by the August 13 high at 1535.03, seemingly setting the stage for a challenge of the weekly chart inflection level at 1563.00. Still, negative RSI divergence warns of ebbing upside momentum. A daily close back below 1535.03 initially targets 1480.00 next.

Gold price chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices bounced back toward resistance at a downward-sloping barrier capping gains since late April, now at 57.72. A daily close above that opens the door to challenge of the 60.04-84 zone. Alternatively, a move below the August 26 low at 52.96 targets sets the stage to retest support 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