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- Gold prices soar on dovish Fed-speak but technical setup warns of topping
- Crude oil prices rise as Russia, Saudi Arabia pledge continued cooperation
- FOMC minutes and API inventory data on tap, trade war news a wildcard
Gold prices soared as dovish comments from Cleveland Fed President Loretta Mester sent the US Doller lower alongside benchmark Treasury bond yields. That offered a familiar boost to anti-fiat and non-interest-bearing assets epitomized by the yellow metal.
The usually hawkish-leaning Mester said she is comfortable with slowing or stopping the unwinding of the Fed’s balance sheet in 2019. She added that this so-called “quantitative tightening” can end without tapering. That’s quite a departure from the near-invisible background normalization advertised previously.
Crude oil prices swung briefly lower as dovish Fed-speak stoked global slowdown fears (presumably, the logic driving policymakers’ defensive pivot in recent months). A swift recovery followed however following news that Russia and Saudi Arabia will continue to coordinate supply efforts.
The Kremlin said that Russian President Vladimir Putin and Saudi King Salman Bin Abdulaziz expressed “readiness to continue coordination” following a phone conversation Tuesday. That may have stoked bets on deeper output cuts aimed at boosting prices as US production continues to swell while demand softens.
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