By Deepta Bolaky
Commodities markets were on sell-off mode on Friday. The black and yellow gold was sent to the downside dragged by the disappointing Purchasing Managers Index data.
The Chart shows that Gold price pulled back as from last Wednesday on a broad-based US dollar strength and retreated from its 2019 highs. The yellow metal struggled to find buyers amid a risk-on mode. Being driven mostly by the greenback, Gold traders will eye the series of US data releases this week for fresh trading impetus. Central banks rate decisions scheduled across the week and trade or Brexit headlines may also bring some volatility.
Technically, XAUUSD is in the RSI oversold conditions and the positive trade headlines emerging this morning might help the yellow metal to bounce back. After being in a consolidation period throughout the month of January, XAUUSD has continued trading to the upside capped by a rising trend line. However, gold prices gave up the bullish momentum and dropped below the line setting a bearish tone for XAUUSD.
XAUUSD (Daily Chart)
Source: GO MT4
Oil prices were also under pressure on Friday whereby WTI and Brent Crude erased more than 2%. After ending February in positive territory, oil prices started a new month in the red. The tightening of global supplies and the US sanctions have supported the upside price action of oil prices since the beginning of the year and last week sell-off started with President Trump’s comments on high oil prices.
UKOUSD and USOUSD (H4 Chart)
Source: GO MT4
We expect the weekly oil reports to provide short-term direction for oil prices: