Crude oil prices continued to rise as Kuwait pledged to join Saudi Arabia and the UAE in cutting output further while API said US fuel consumption for June surged to highest level in a decade. Second-quarter earnings reports from Baker Hughes, Chevron and Exxon Mobil are now in focus.
Traders will look to forward guidance from the industry heavyweights to inform expectations for supply and demand trends. With that said, yesterday’s offering from big names including ConocoPhilips, Valero and Marathon produced mixed results and didn’t seem to have a discrete impact on price action.
Gold prices edged lower as upbeat US economic data bolstered the US Dollar, undermining the appeal of anti-fiat assets. Follow-through was understandably limited however, with the yellow metal ultimately ending the day little-changed (as expected) as markets look ahead to second-quarter US GDP figures.
Consensus forecasts see the on-year growth rate rising to 2.7 percent in the three months through March compared with 1.4 percent recorded in the first quarter. US economic news-flow has cautiously improved relative to baseline expectations since mid-June, opening the door for an even rosier result.
Data suggesting investors are underestimating the economy’s vigor might lend support to the Fed’s argument that recent disinflation is temporary. This might force the markets to rethink their more dovish policy outlook, fueling a larger USD recovery and punishing gold by extension.
GOLD TECHNICAL ANALYSIS – Gold prices following a test of chart inflection point support at 1260.85. A break above this barrier confirmed on a daily closing basis exposes the 38.2% Fibonacci expansion at 1271.20. Alternatively, a reversal back below the 23.6% level at 1245.91 paves the way for another challenge of the 14.6% Fib at 1230.31.
Chart created using TradingView
