Crude Oil Prices at Risk if US Economic Data Cool Fed Rate Cut Bets

CRUDE OIL & GOLD TALKING POINTS:

• Crude oil prices fall as OPEC+ dithers on output reduction

• Gold prices seesaw on ECB rate decision, US inflation data

• Firm US retail, confidence data may cool Fed rate cut bets

Crude oil prices fell as OPEC+ energy ministers – a steering group for the cartel-led coordinated output cut effort among major suppliers – dithered on reducing production further. The newly-minted representative from Saudi Arabia said any such decision will have to wait until December.

Meanwhile, gold prices seesawed. The metal initially rushed higher as the ECB announced another round of quantitative easing, then promptly reversed course as headline US CPI registered lower than expected. That seemed to boost confidence in potent Fed easing at next weeks FOMC meeting, buoying risk appetite.

CRUDE OIL PRICES AT RISK IF US ECONOMIC DATA DENTS FED RATE CUT BETS

Looking ahead, US retail sales and consumer confidence data are in focus. Outcomes echoing the recent tendency for US economic news-flow to top baseline forecasts might cool Fed rate cut speculation. That is likely to dent risk appetite, weighing on oil prices.

Gold prices might have been expected to track higher in a risk-off environment as capital flowing toward the safety of government debt drive down bond yields. That may be a difficult feat to muster however when worries about higher-than-expected borrowing costs are the source of turmoil themselves.

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GOLD TECHNICAL ANALYSIS

Gold prices continue to hover above support near the August swing bottom in the 1480.00-84.63 area. A daily close below that exposes the 1437.70-52.95 area next. Alternatively, a push above the 1520.34-23.05 price inflection area sets the stage for rise to challenge the weekly chart inflection point at 1563.00.

Gold price chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices continue to hover above support guiding the upswing from Augusts swing bottom. A daily close below this level – now at 55.11 – faces a minor barrier at 52.96 along the way to challenge major support near the $50/bbl figure. Alternatively, a bounce that clears the September 10 high at 58.76 sets the stage for a test of the 60.04-84 area.

Crude oil price chart created using TradingView

COMMODITY TRADING RESOURCES

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