Prices of Gold and Crude Oil Fall as US Dollar Strengthens. the WTI Triangle Breakout is in focus

COMMODITIES BRIEFING: GOLD, XAU/USD, CRUDE OIL, WTI, US DOLLAR, AND ASCENDING TRIANGLE

Highlight:

• UK government budget draught and US initial jobless claims were the leading causes of Thursday's decline in gold and crude oil prices as stocks rose.

• WTI breaks below the Ascending Triangle while Gold rejects a crucial Fibonacci milestone.

Gold and crude oil prices weakened on Thursday, generally following a deterioration in risk appetite as the US Dollar rallied. The S&P 500 fell, although gains right before the close kept the day's losses to a little under 0.3%. For XAU/USD and WTI, however, which closed Thursday with approximately 0.7% and 3.8% lower closing prices, respectively, was not enough to offer the same.

As the United Kingdom announced budgetary restraint, attitudes began to deteriorate. Jeremy Hunt, the Chancellor of the Exchequer, unveiled a USD 65 billion packages of tax increases and budget cuts to combat inflation. Then, unexpectedly lower first US unemployment claims highlighted the Federal Reserve's tightening strategy.

Today, more Fedspeak is transmitted. James Bullard, president of the St. Louis Fed, stated that he believes the lowest level for aiming interest rates is between 5 and 5.25%. Anti-fiat gold prices were under pressure due to rising US Dollar and Treasury yields. Crude oil was under pressure due to the stronger US dollar, the UK fiscal budget's demand-side effects, and other factors.

Economic event risk notably dies down heading into the weekend. US existing home sales for October will cross the wires. Surging mortgage rates have been working to slow the housing market, and with it, sales. Given that the labor market remains tight, slowing sales is most likely a function of affordability issues for the time being. As such, gold and crude oil might continue focusing on general risk appetite and brush aside the data.

Technical Analysis of Gold

Gold has been considered a highly valuable commodity for millennia and the gold price is widely followed in financial markets around the world. Based on the recent analysis it dropped back below 1766 after trying to maintain a push over the 78.6% Fibonacci retracement. Even so, this year's early breach over the long-term falling trendline is a significant bullish pivot. The 20-day Simple Moving Average for the short term is still some distance from current levels due to how quickly gold has just recovered. A significant barrier is the August peak (1807).