DailyFX.com -

Talking Points

  • Crude Oil Consolidates As Traders Look Past Geopolitical Turmoil
  • Precious Metals Drifting Lower On Yellen-Inspired USD Strength
  • Silver Marching Towards $19.00 Alongside Bearish Tech. Signals

Crude oil traders are likely catching their breath after several weeks of sharp declines for the commodity. An absence of major oil-impacting news flow from the Middle East could leave the WTI benchmark to continue its consolidation. Yet in the absence of a material escalation of the turmoil in Iraq or Eastern Europe the fundamental drive for a sustained recovery may be lacking.

Meanwhile, the precious metals are drifting lower in Asian trading today. Broad-based US Dollar strength following the Jackson Hole Symposium over the weekend has likely weighed on gold. However, the fundamental catalysts to spur further gains for the greenback over the remainder of the session are relatively limited. US Housing data and service PMIs due in the coming hours remain on the periphery compared to labor market figures in terms of shaping policy expectations. A lackluster session for the USD could in turn afford gold and silver some breathing room.


Crude is threatening a corrective bounce following the emergence of a Harami candlestick pattern on the daily. Yet odds of a more sustained recovery remain stacked against the commodity. This is in light of the sustained downtrend made evident by the descending trendline and prices holding below the 20 SMA. Sellers are likely to re-emerge at the 95.00 handle, which may offer a fresh entry into new short positions. A daily close above the trendline barrier would likely be required to signal the possibility of a more sustained shift in sentiment.

Crude Oil: Recovery May See Sellers Emerge At 95.00

Gold Resumes Descent As USD Bulls Return, Crude Oil Lacking Fuel

Daily Chart - Created Using FXCM Marketscope 2.0


A Harami pattern has emerged for gold which awaits confirmation from a successive up period before suggesting the potential for a corrective bounce. This leaves risks skewed to the downside while sub 1,280. An eventual descent on the 1,241 floor remains a possibility. However, a multi-month low for the ATR warrants some skepticism over a sustained decline, given anemic volatility readings generally do not support breakouts.

The DailyFX SpeculativeSentimentIndex suggests a bearish bias for gold based on trader positioning.

Gold: Downside Risks Remain While Sub 1,280

Gold Resumes Descent As USD Bulls Return, Crude Oil Lacking Fuel

Daily Chart - Created Using FXCM Marketscope 2.0


A descending trendline on the daily continues to keep silver in check as the precious metal descends towards the 19.00 target. However, signs of hesitation from the bears are emerging. This is made evident by the ensemble of Dojis on the daily and fading momentum reflected by the Rate of Change indicator. Yet in the absence of outright bullish reversal patterns the immediate risk remains to the downside.

Silver: Slowly Marching On $19.00 Target

Gold Resumes Descent As USD Bulls Return, Crude Oil Lacking Fuel

Daily Chart - Created Using FXCM Marketscope 2.0


Copper has vaulted over the critical 3.19 hurdle which may open the door to a retest of the base metal’s recent highs. The reversal follows a Bullish Engulfing formation which helped to signal a shift in sentiment for the commodity.

Copper: Sentiment Shifts As Hurdle Cleared

Gold Resumes Descent As USD Bulls Return, Crude Oil Lacking Fuel

Daily Chart - Created Using FXCM Marketscope 2.0


Palldium’s core uptrend remains intact following a rebound from the 200 SMA and 861 barrier. This casts the spotlight back to the metal’s recent highs at the critical 900 ceiling. A break below the ascending trend channel would be required to warn of a top.

Palladium: Rebounds With Core Uptrend Intact

Gold Resumes Descent As USD Bulls Return, Crude Oil Lacking Fuel

Daily Chart - Created Using FXCM Marketscope 2.0


An absence of bullish reversal signals and presence of a sustained downtrend for Platinum may yield further declines for the commodity. A daily close below the 1,424 floor opens a knock on the 1,395 barrier. However, after ten straight days of declines a corrective bounce seems overdue at this point. A more sustained recovery would require a leap over the descending trendline.

Platinum: Targeting 1,395 With Bearish Signals Intact

Gold Resumes Descent As USD Bulls Return, Crude Oil Lacking Fuel

Daily Chart - Created Using FXCM Marketscope 2.0

Written by David de Ferranti, Currency Analyst, DailyFX

To receive David’sanalysis directly via email, please sign up here

Contact and follow David on Twitter: @DaviddeFe

Related Articles
  1. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  2. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  3. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  4. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  5. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  6. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  7. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  8. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  9. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  10. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.

You May Also Like

Hot Definitions
  1. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  2. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  3. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  5. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  6. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!