Gold Prices May Fall As US Midterm Elections Boost US Dollar

Commodity prices were little-changed at the start of the trading week as expected, with markets probably leery of directional progression as hefty event risk by way of the US midterm elections looms ahead. A corrective crude oil price upswing swiftly evaporated intraday while gold prices continued to drift cautiously lower, retracing last week’s breakneck surge.

US MIDTERM ELECTIONS MAY BOOST US DOLLAR, HURT COMMODITIES

Looking ahead, a muted economic calendar is headlined by API crude oil inventory flow data. It will be weighed up against expectations calling for a 1.59 million barrel inflow to be revealed in official DOE figures due Wednesday. The EIA Short-Term Energy Outlook report will also cross the wires. It may highlight swelling US output yet again, bolstering recent oversupply concerns.

Markets may look past such mundane considerations however with US voting in the spotlight. Baseline forecasts envision a divided Congress as the Democrats reclaim a majority in the House of Representatives while Republicans retain control of the Senate. Bets on the legislative docket being cleared of everything but an infrastructure spending plan may boost the US Dollar in a scenario, weighing on commodities.

GOLD TECHNICAL ANALYSIS

Gold prices continue to mark time near resistance in the 1235.24-41.64 area. A daily close above this threshold targets the 1260.80-66.44 region next. Alternatively, a turn below support in the 1211.05-14.30 paves the way for a challenge of the 1180.86-87.83 zone.

(Click on image to enlarge)

Gold Prices May Fall as US Midterm Elections Boost US Dollar

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices stalled ahead of support at 61.84. Breaking below this barrier on a daily closing basis opens the door for a test of the $60/bbl figure. Alternatively, a move back above the 64.26-45 area and a falling trend line following closely thereafter at 65.11 exposes support-turned-resistance at 67.18.

(Click on image to enlarge)

1 2
View single page >> |

Disclosure: Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.