Commodities made little headline yesterday with US markets shuttered for a national day of mourning following the death of former President George H.W. Bush. Another intraday rally in crude oil prices failed to find follow-through, with the WTI contract erasing early gains to settle little-changed. Gold prices drifted sideways, echoing a similarly non-committal US Dollar.

CRUDE OIL PRICES EYE PIVOTAL OPEC MEETING

Looking ahead, all eyes turn to Vienna where OPEC ministers are due to gather for a meeting expected to result in a new coordinated output cut. Members of the so-called OPEC+ grouping comprising cartel members and key allies including Russia signaled support for the move. Agreement on the size of the producer bloc’s supply reduction remained elusive, however.

This offers something of a framework for interpreting how markets might on-board the meeting’s outcome. If officials fail to work out the details – leaving them to be find-tuned over the coming months and subsequently reviewed at a future meeting – this is likely to register as a disappointment that pushes prices crude oil prices lower. A token decrease seen as insufficient to offset surging US output might have a similar effect.

GOLD MAY BENEFIT AS YIELDS FALL AMID MARKET ROUT

As for gold, it may find a bit of support as Treasury bond yields fall amid risk aversion, boosting the relative appeal of non-interest-bearing alternatives. Asia Pacific bourses are taking heavy losses and bellwether S&P 500 stock index futures are pointing sharply lower ahead of the opening bell on Wall Street, hinting that more of the same is on tap ahead. Any haven-linked US Dollar gains might cap the yellow metal, however.

GOLD TECHNICAL ANALYSIS

Gold prices continue to hover at resistance in the 1235.24-41.64 area. A daily close above it paves the way for a test of the 1260.80-66.44 zone. Alternatively, a reversal below rising trend support at 1206.97 sees the next downside barrier marked by a range floor in the 1180.86-87.83 region.

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CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices continue to stall below resistance at 53.33 (former support, falling trend line), with a pair of Shooting Star candlesticks hinting at a possible turn lower ahead. A break below the October 9, 2017 low at 49.16 exposes the August 31, 2017 bottom at 45.62. Alternatively, a daily close above 53.33 targets former support-turned-resistance at 55.24.

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