Safe haven gold and silver up on risk-off play, oil lags following API surplus and trade woes

Worsening US-China trade talk hopes take oil prices lower, while safe haven play aids both gold and silver.

GOLD: US central bank easing and rate cut likelihoods aids the non-yielding precious metal

It was a risk-off safe haven play yesterday, with yields and indices dropping and gold registering a higher finish against the greenback. The catalysts always seem to be plenty for gold, be it rising rate cut likelihoods out of the US Federal Reserve (Fed) meeting towards the end of this month, central bank balance sheets set to rise putting more liquidity into the system, geopolitical tensions that are failing to subside, and diminishing hopes for US-China trade talks before they’re even set to begin tomorrow. Overall, while the technicals are looking more positive with its price crossing back above its 50-day moving average (MA) – the last of its main MA’s – the daily outlook remains more consolidatory unless a fundamental catalyst can push its price past its pivot points, but where the weekly outlook remains a stalling bull trend technical overview.

SILVER: Outperforming relative to gold but still relatively range-bound

As with gold, its precious metal cousin managed to finish higher for the session posting a larger percentage gain, with its price crossing back above its 50-day moving average (and now above all its main long-term daily MA’s). The volatility has a tendency to be higher for this pair’s price, and hence taking its cue from where gold and the greenback may go first might be more ideal before initiating a trade here, and going for contrarian breakout strategies should any further fundamental catalyst(s) occur with tonight’s Fed minutes or tomorrow’s US-China trade talks.

OIL – US CRUDE: Diminishing trade hopes and an API surplus keeps energy back near the lows

American Petroleum Institute's (API) estimate regarding US crude oil inventories came in at a 4.13M surplus following last week's 5.9M deficit, though if last week is any indication, Energy Information Agency's (EIA) more encompassing estimate this evening may contradict that with expectations for a more modest 1.8M surplus. US-China trade talks starting tomorrow matter in the context of demand, while supply side factors will continue to look towards geopolitical tensions that are rising more in the Middle East. The EIA’s short-term energy outlook revised its oil price downwards again, but a supply side shock always leaves the energy commodity vulnerable to an upside breakout, but tested to the downside in the absence of it. While the technical bias remains negative, keep in mind that on the weekly volatile breakout strategies are more ideal if/when any significant news breaks.


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