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GOLD & CRUDE OIL TALKING POINTS: Crude oil pricesspike sharply higher as Houthis strike Saudi Arabia Gold prices up amid risk aversion but chart setup warns of topping FOMCpolicy announcement may be quick to recapture the spotlight
Gold prices rose as markets quaked afterYemen's Houthi rebels struck energy infrastructure in Saudi Arabia , producing a wild jump in crude oil prices. Yields fell as capital scrambled for the safety of government bonds, boosting the relative appeal of the non-interest-bearing yellow metal. BellwetherS & P 500futures duly tracked lower also, warning that more of the same might be in the cards.
Still, the case for immediate follow-through seems somewhat shaky. While the hit to supply capacity is very real indeed, ample reserves and abundant capacity of US shale might mean that the markets' initial shock at the weekend's news flow could subside as gold traders refocus their attention on a more pressing matter:the FOMC monetary policy announcement .
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GOLD TECHNICAL ANALYSIS
Gold prices may be carving out a bearish Head and Shoulders (H & S) chart pattern below resistance at 1563.00, a weekly chart inflection level. Confirmation of the setup on a daily close below support at 1480.00 would imply a measured downside target within a hair of the $1400/oz figure. Negative RSI divergence seems to bolster the case for a downside scenario.
Gold pricechart created usingTradingView
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices are settling downward after adramatic upward gap at the start of the trading week . A daily close back below the $60/bbl figure initially sets the stage for a retest of the September 10 high at 58.76. Immediate resistance is in the 63.59-64.43 zone, with a push above that exposing April's swing top.
Crude oil price chart created usingTradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or@IlyaSpivakon Twitter
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