Gold, Crude Oil Prices May Accelerate Lower on Upbeat FOMC

GOLD CRUDE OIL TALKING POINTS:

  • Gold and crude oil prices seesaw, echoing US Dollar after midterm election
  • Intraday gains evaporated as markets risk appetite, Fed rate hike bets firmed
  • Upbeat FOMC policy announcement may punish commodity prices further

Commodity prices seesawed in the aftermath of US midterm elections yesterday. Initial US Dollar weakness offered a lift as markets worried about fiscal policy deadlock after the Democrats secured a hold on the House of Representatives while Republicans successfully defended (and expanded) their majority in the Senate. The move came undone over the course of the day however, as expected.

Perhaps most tellingly, the Greenback recovered alongside rising stock prices while the priced-in 2019 interest rate hike outlook implied in Fed Funds futures steepened to its most hawkish setting in a month. That seemingly ratifies last week’s forecast suggesting as much would happen as markets envision a growth- and inflation-boosting bipartisan infrastructure spending effort.

GOLD, CRUDE OIL MAY FALL AS US DOLLAR GAINS ON FOMC

From here, the spotlight turns to the FOMC monetary policy announcement. A rate hike is not expected, with

Article source: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2018/11/08/Gold-Crude-Oil-Prices-May-Accelerate-Lower-on-Upbeat-FOMC.html