Gold Prices Hurt as Fed Outlook Firms, Crude Oil May Be Topping

GOLD CRUDE OIL TALKING POINTS:

  • Gold prices pressured as 2019 Fed rate hike outlook continues steepen
  • Crude oil price chart setup hints a significant top may be taking shape
  • Brazilian election results may disrupt an otherwise consolidative tone

Last week’s focus on swelling Fed rate hike bets looks to have carried over into price action at the start of the trading week. The priced-in tightening path implied in Fed Funds futures now calls for two hikes and puts the probability of a third at 23.8 percent, the highest yet this year.

This has understandably buoyed the US Dollar, weighing on commodity prices by extension. Gold prices are down to reflect the ebbing appeal of anti-fiat alternatives while crude oil prices are giving in to de-facto selling pressure since they are priced in USD terms on global markets.

COMMODITY DROP MAY STALL, BRAZIL ELECTION EYED

Follow-through may be limited in the near term however. The economic calendar offers little to propel the narrative while the proximity of heavy-duty event risk by way of an IMF global economic forecast update (Tuesday) and US CPI data (Wednesday) discourages directional commitment.

Article source: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2018/10/08/Gold-Prices-Hurt-as-Fed-Outlook-Firms-Crude-Oil-May-Be-Topping.html