Gold Prices Hit 3-Week High But Chart Still Warns of Topping

CRUDE OIL & GOLD TALKING POINTS:

• Gold prices hit three-week high on US consumer confidence report

• Chart setup still hints gold may be tracing out bearish H&S pattern

• Crude oil prices may fall on CPB trade report, EIA inventory data

Gold prices rose for a fourth consecutive day. Disappointing US consumer confidence data offered the catalyst this around. It put the markets in a defensive mood, pressuring yields lower and thereby boosting the relative appeal of non-interest-bearing alternatives epitomized by the precious metal. Cycle-sensitive crude oil prices tracked lower alongside stocks in the meanwhile.

Looking ahead, the CPB World Trade Monitor headlines an otherwise muted data docket. The Netherlands‘ official statistics agency will probably say cross-border commerce remains in retreat as the US-China trade war cools activity both directly – by disrupting a critical supply chain connecting the world’s top-two economies – and through its undermining of international dispute resolution norms.

That may amplify global economic slowdown fears. To the extent that this encourages Fed rate cut bets and pulls down yields, it may be supportive for gold prices. Crude oil may continue to suffer alongside other growth-geared assets. EIA inventory flow data may add to selling pressure if it echoes an API report showing stockpiles added 1.4 million barrels last week. Baseline forecasts envision a 276k-barrel draw.

Gold prices still look to be tracing out a bearish Head and Shoulders (H&S) chart pattern. Confirming the setup on a daily close below 1480.00 implies a downside target near the $1400/oz figure. Support in the 1437.70-52.95 area is seen along the way. A breach of resistance at 1535.03 targets 1563.00 next.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices dipped toward support guiding them higher since early August (now at 54.95). A daily close below that sets the stage to challenge a long-standing downside barrier near the $50/bbl figure. Alternatively, a move above resistance hurdles at 58.76 and 60.84 targets Septembers top near 64.00.