CRUDE OIL & GOLD TALKING POINTS:
- Crude oil prices[1] sink as Saudi Arabia joins Russia call for output boost
- Gold prices[2] face selling pressure in risk-on and -off market conditions
- Ebbing Italy worries boost sentiment but follow-through may be absent
Crude oil prices plunged on Friday as Saudi energy minister Khalid al-Falih endorsed prior comments from his Russian counterparts[3] calling for self-imposed output curbs to be relaxed, perhaps as soon as June. Gold prices edged lower as oil’s plunge pulled down energy-linked stocks, contributing to broader risk aversion that fed haven demand for the US Dollar[4].
The oil selloff continues early Monday as Asia Pacific traders take their turn to price in Friday’s news. Meanwhile, gold faces renewed selling pressure as risk appetite improves, boosting bond yields and sapping the appeal of non-interest-bearing assets. Investors’ chipper mood follows news that Italian President Sergio Mattarella vetoed the nomination of eurosceptic Paolo Savona to the post of Economy Minister[5].
ITALY REMAINS IN FOCUS, US MARKETS SHUTTERED
Looking ahead, a thin offering on the economic calendar hints that established momentum ought to find few roadblocks to near-term continuation. The closure of US markets for the Memorial Day holiday is likely to sap liquidity and may undermine scope for follow-through however. Furthermore, the highly fluid situation in Italy may yet amount to headline flow that pushes sentiment back into “risk-off” mode.
See our quarterly crude oil price forecast[6] to learn what will drive the trend through mid-year!
GOLD TECHNICAL ANALYSIS
Gold prices are pulling back from falling trend line resistance guiding
