Crude oil prices rose after a weekly inventory estimate from API showed a drawdown of 7.5 million barrels. This stands in stark contrast with expectations for build of 3.4 million barrels to be reported in the upcoming release of official EIA inventories data. Gold prices continued to mark time as traders waited for the FOMC monetary policy announcement to cross the wires before showing directional commitment.

An outright rate hike is unlikely but the US central bank may ramp up rhetoric setting the stage for tightening in December. The US Dollar is likely to rise alongside front-end bond yields in this scenario, sapping demand for anti-fiat assets and pushing gold prices downward. Crude oil may likewise weaken as the greenback’s gains echo into the USD-denominated WTI benchmark, though EIA flows data could complicate price action.

GOLD TECHNICAL ANALYSIS – Gold prices continue to cling to support in the 1303.62-08.00 area (May 2 high, 38.2% Fibonacci retracement). A daily close below this threshold exposes the 50% level at 1287.29. Alternatively, a move above the 23.6% Fib at 1333.62 targets trend line resistance at 1347.26.

CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices turned higher after testing support at 43.02, the September 1 low. From here, a daily close above the 23.6% Fibonacci expansion at 45.03 targets the 38.2% level at 46.46. Alternatively, a reversal back below the 14.6% Fib at 44.15 opens the door for another test of the $43/barrel figure.