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Gold prices fall with US consumer confidence as crude oil gains on OPEC+ output woes

Gold prices fell as crude oil prices climbed over the past 24 hours; softer US consumer confidence, OPEC+ softer output key factors and all eyes are on the ECB forum for Powell and Lagarde speak next.

Gold prices aimed slightly lower over the past 24 hours as crude oil prices managed to finish on an upbeat. The anti-fiat yellow metal was being pressured by a stronger US dollar, a consequence of risk aversion as the tech-heavy Nasdaq 100 sank over 3%. However, it could have been much worse for gold. The flight to safety meant Treasury yields weakened, raising the attractiveness of XAU/USD.

The US Conference Board Consumer Confidence gauge dropped to 98.7 in June versus 100 anticipated. This is down from 103.2 in May, resulting in a 16-month low. Woes about inflation continue eating away at Americans’ views of the economy. While respondents still seemed on course to purchase more durable goods ahead, appetite for leisure (vacationing) sagged amid rising airfare rates.

Despite the deteriorating sentiment, crude oil prices managed to stay afloat. Reports crossed the wires from an OPEC+ delegate that the oil-producing alliance was 2.7 million barrels per day below its output target in May. This could be keeping supply at bay, offering an upside push for WTI. However, energy prices face an increasingly challenging environment amid rising global growth slowdown concerns.

Over the remaining 24 hours, commodities will be eyeing a deluge of central bank commentary. There will be a panel discussion at the ECB’s forum in Sintra. Speakers poised to present include Fed Chair Jerome Powell and ECB President Christine Lagarde. If policymakers reiterate their hawkish views, this could bode ill for market sentiment, perhaps denting gold and crude oil prices.

Gold technical analysis

On the daily chart, gold has been broadly consolidating since May. Recent price action is slowly bringing XAU/USD closer to the key 1787 – 1810 support zone. There, the yellow metal will face its next test. The near-term 20- and 50-day Simple Moving Averages remain pointed lower, offering a downside technical bias.

XAU/USD daily chart

Crude oil technical analysis

Crude oil prices continue to recover from losses last week. A bullish Morning Star has since been confirmed, offering an upside technical bias. Moreover, prices are trying to close back above a key rising trendline from December. Such an outcome would further bolster the upside argument for WTI. Otherwise, resuming losses entails falling toward the May low at 98.22.

WTI daily chart

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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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