Oil and Gold: Price review for the week ahead

This preview of weekly data examines USOIL and XAUUSD, with economic data expected later this week as the primary market drivers of the near-term outlook.

Highlights of the week: RBA meeting minutes, US inflation, British GDP, US PPI

Tuesday

RBA meeting minutes at 12:30 AM GMT. These are published 2 weeks after the interest rate decision. They give full detail of the discussions and the different views, and record the votes of the members of the committee. This could spark some volatility in the Australian dollar and the instruments traded against it.

Wednesday

Chinese inflation rate at 01:30 AM GMT. The market is expecting this figure to tick upwards by 0.2%, reaching 1% for September.

US Inflation rate at 12:30 PM GMT, where the consensus is for an increase of around 0.3%, reaching 3.7% for September. If this is broadly accurate, then it might not influence a change in the stance of the Federal Reserve at their next meeting, where the probability for now is that they will keep the rates stable. On the other hand, if there is any significant surprise change in the actual figure, then it will affect the dollar in the short term.

Tuesday

British GDP growth at 06:00 AM GMT. The market consensus is that the figure will decrease from 0.4% to -0.1% month over month.  This might not have a major effect on the quid since it is for the month of August; however, it would provide some hints on the overall economic performance of the British economy.

US Producers Price Index (PPI) at 12:30 PM GMT. Market participants are expecting the figure to come out at 0.5% over 0.4% of the previous reading. If this is confirmed, then it could potentially hint at higher inflation figures in the coming months since higher producers' costs usually roll down to consumers, pushing inflation figures to the upside.

Fed chair Kevin Warsh speech on Thursday at the IMF’s annual meeting in Bangkok. It's a particularly interesting point in time because this is ahead of its two-day meeting ending on October 28 and could help markets have "less uncertainty" about the outcome of the meeting.

USOil, daily

Oil prices fell as traders weighed rising Middle East tensions against resilient crude flows. Despite attacks on Saudi Arabia and another tanker in the Strait of Hormuz, exports from the Persian Gulf have recovered to around 17.5 million barrels a day, or 98% of pre-war levels, limiting the impact on supply. Markets are also assessing a potential Russia-Ukraine energy ceasefire and Russia’s decision to resume some diesel exports, although the additional volumes are relatively small. Meanwhile, the IEA is calling for faster releases of diesel reserves as global fuel markets remain tight.

From a technical perspective, crude oil is showing sideways-to-bullish momentum, trading around $90 after finding support near the 50% Fibonacci level at $88. Price is holding above the rising 50-day moving average, while the 100-day moving average remains well below at around $83.5, supporting the broader bullish structure. The key resistance is at $91, followed by the 23.6% Fibonacci level around $95. A sustained break above $91 could open the way toward $95, while a move below $88 would weaken the setup and expose the 61.8% level at $85.

Gold-Dollar, daily

Gold traded below $4,200 as investors weighed lower oil prices against persistent inflation risks and awaited key US economic data for clues on the Fed’s rate path. Falling Treasury yields and continued buying by gold ETFs and China’s central bank provided some support. However, gold remains under pressure from elevated bond yields and expectations of further monetary tightening. The metal has fallen about 20% since the US-Iran war began, while ongoing energy disruptions in the Middle East continue to create inflationary pressure. Fed Chair Kevin Warsh’s upcoming comments and US inflation data could provide further direction for gold.

From a technical point of view, gold rebounded from the support of $4,130 and is currently on route to test the resistance of $4,250, which is the next major resistance area consisting of the 61.8% daily Fibonacci retracement level and also the 100-day simple moving average. The Stochastic oscillator is in neutral levels hinting that there is potential for the price to move in either direction in the short term. The moving averages are validating the overall bullish trend despite the bearish trend which is in place since late August. The Bollinger Bands are also quite expanded, showing that there is sufficient volatility in the market to support any sharp moves; however, we might need a new catalyst in the market to see any sharp moves anytime soon.