Crude Oil, Gold Prices Rise as Trump Comments Hurt US Dollar

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CRUDE OIL & GOLD TALKING POINTS:

Crude oil, gold prices rise as Trump comments hurt US Dollar
Commodities may retreat in pre-positioning for FOMC minutes
API inventory flow report to foreshadow official EIA statistics

A pullback in the US Dollar set the trajectory for key commodities on Monday. Crude oil and gold prices rose in tandem as jawboning from Donald Trump amplified the greenback’s retreat, which has been underway since late last week against a backdrop of improving risk appetite.

The US president again expressed displeasure with the Fed’s tightening efforts, saying he intends to “criticize” the central bank if it keeps raising rates. This followed reports that he told donors Powell is disappointing his hopes for a “cheap-money Fed chairman” at a gathering Friday.

COMMODITIES REBOUND MAY STALL, API DATA DUE

Looking ahead, the rebound in commodities prices may stall amid pre-positioning for Wednesday’s release of minutes from Augusts’ FOMC meeting, which produced a decidedly hawkish statement. Bets on a similarly confident tone in the Minutes document may see USD recover some lost ground.

On the data front, the weekly API inventory flow report is due to cross the wires. The outcome will be judged relative to forecasts calling for a 1.08 million barrel drawdown to be reported in official EIA statistics set to cross the wires Wednesday.

See our guide to learn about the long-term forces driving crude oil prices!

GOLD TECHNICAL ANALYSIS

Gold prices continued to recover, with a daily close above former support at 1204.59 breaking the bounds of the near-term downtrend and opening the door for another challenge of the 1236.66-40.86 area. Near-term support remains at 1160.37, the August 16 low.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices are still oscillating in familiar territory above support in the 63.96-64.26 area. A break below that on a daily closing basis targets 61.84 next. Alternatively, a move back above trend line support-turned-resistance at 68.65 paves the way for a retest of the 69.89-70.41 zone.