Gold Prices at Risk as Crude Oil Awaits Canada GDP Data
Anti-fiat gold prices spent the previous 24 hours in range-bound trade which was also seen in the US Dollar and in longer-dated Treasury yields. The latter two are key fundamental drivers for XAU/USD. Financial markets spent Monday recovering from the risk aversion tone left behind at the end of last week. The S&P 500 and Dow Jones closed +1.47% and +2.32% respectively.
The improvement in risk appetite supported growth-oriented crude oil prices as WTI experienced its best day in over 3 weeks (+3.8%). A combination of rosy US home sales and Boeing being given the greenlight to begin testing its troubled 737 MAX plane likely improved market mood. This is as US coronavirus cases only climbed 1.2% over the past 24 hours, lower than the previous week’s 1.6% average.
Crude oil prices may continue climbing as S&P 500 futures point higher following better-than-expected Chinese manufacturing PMI data. The latter may have supported global growth recovery bets, which could be underscored by upcoming Canadian GDP data. For gold prices, the near-term trajectory is more uncertain. Rising optimism in financial markets may boost government bond yields at the expense of USD.
GOLD TECHNICAL ANALYSIS
Gold prices have left behind a Doji candlestick on the daily chart. This is a sign of indecision which could precede a turn lower given a close lower ahead. That would place the focus on near term rising support from the beginning of June – red line. Otherwise, further gains may see the precious metal continue on its cautious journey towards the 2012 high at 1795.
XAU/USD DAILY CHART
CRUDE OIL TECHNICAL ANALYSIS
WTI crude oil prices remain under key resistance at 40.42 – 41.60. Immediately below, the 20-day simple moving average (SMA) sits as support. Resuming the uptrend entails pushing above the former, opening the door to testing 43.87, the January low. Otherwise, a descent through the 20-day SMA opens the door to testing 39.40. Taking out the latter exposes 37.10.
WTI CRUDE OIL DAILY CHART
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.