Crude oil prices retreated alongside stocks on Friday as risk appetite soured across financial markets. Escalating US-China tensions seemed like the catalyst at work as Beijing demanded that the US close its consulate in Chengdu. The move followed Washington’s decision to shatter China’s consulate in Houston, Texas. US officials claimed it was used for espionage.

Gold prices pushed higher as the US Dollar continued to weaken, driving demand for anti-fiat alternatives. The global reserve currency was unable to find support from its usual haven appeal even as sentiment soured, which may reflect speculation that the Federal Reserve will respond to newly-emerging headwinds with an expansion of stimulus. The FOMC rate-setting committee meets this week.

Looking ahead, a relatively quiet offering on the economic data docket seems likely to yield to broader trends in the market mood again. Bellwether S&P 500 futures are pointing meaningfully higher, arguing for a risk-on tilt. That may help lift crude oil prices. Gold may continue to push higher as well as the upbeat mood guides capital flows out of cash, keeping the Greenback under pressure.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices continue to hover below resistance in the 42.40-43.88 area. A push above this barrier looks likely to set the stage for a challenge of the $50/bbl figure. Alternatively, dropping through rising trend line support limiting the downside since late May appears to put the 34.78 inflection level into focus next.

Crude oil price chart created using TradingView

GOLD TECHNICAL ANALYSIS

Gold prices have extended upward to a record high. A daily close above resistance in the 1917.59-20.94 area, marked by the 78.6% Fibonacci expansion and the 2011 peak, looks like it may open the door to challenge the 100% level at 1984.77. Support is at 1864.86, the 61.8% Fib. A reversal back below that eyes the intersection of the 50% expansion and a rising trend line at 1827.82.

Gold price chart created using TradingView