Weekly data: Oil and Gold: Price review for the week ahead.

This preview of weekly data examines USOIL and XAUUSD, where economic data expected later this week are the primary market drivers for the near-term outlook. 

Highlights of the week: US PPI, German inflation, Canadian GDP

Tuesday

• U.S Producers Price Index (PPI) at 13:30 GMT. Market participants are expecting the figure to come out at 0.3% versus -0.1% of the previous reading. If this is confirmed, it could potentially hint at higher inflation figures in the coming months, as higher producer costs usually roll down to consumers, pushing inflation figures to the upside.

Friday

• Preliminary German inflation rate at 13:00 PM GMT. The market consensus for November is for the figure to remain static at 2.3%. However, any significant deviation from the actual publication could most likely influence the European inflation figure in the following week. 
• The Canadian GDP growth rate for the third quarter is at 13:30 GMT. The yahead figure is expected to increase from -1.6% to 0.4% while the quarter-over-quarter is expected to also increase from -0.4% to 0.3%. If these data are confirmed, then the loonie could gain in the short term against its pairs. 

USOIL, daily

Oil stabilized later than a sharp weekly drop as markets weighed the possibility of a Russia-Ukraine peace deal that could add even more supply to an already well-supplied market. Prices have been sliding for months due to rising global production and expectations of a record surplus in the coming year. A potential agreement that leads to sanction relief for Russia would increase the oversupply even further, although political hurdles remain, and European leaders are pushing for revisions to the peace framework. Traders are also watching Middle East tensions and softer near-term market tightness, while OPEC and its partners prepare to review output strategy later in the month.

 On the technical side, the crude oil price is testing the support of the lower band of the Bollinger Bands around the $58 price area. The Stochastic oscillator is in extremely oversold levels, hinting that a bullish correction may be forming, while the Bollinger Bands are quite expanded, indicating that volatility is present to support any sharp moves. On the other hand, the moving averages are validating an overall bearish trend in the market, and therefore any bullish correction might be minor. In the event that the price does indeed correct to the upside, the first area of potential resistance may be viewn around $60, which represents both the psychological resistance of the round number and the 38.2% Fibonacci retracement level. If, however, it continues its bearish trajectory, then it might retest the lows of $57, which was tested again in late October. 

Gold-dollar, daily

Gold held steady as traders assessed the odds of another Fed rate cut before the end of the year. Prices stayed above the recent handle later than a mild weekly pullback, with sentiment mixed following cautious comments from several Fed officials. New York Fed President John Williams opened the door to a near-term cut, assisting gold trim losses late Friday, though it still finished lower on the day.

The U.S. shutdown has delayed key data releases, leaving markets without guidance; however, some data due this week will assist clarify the outlook, with futures currently pricing in a slightly above 70% chance of a quarter-point cut next month. Lower rates typically support gold, which doesn’t yield interest.

The path ahead remains uncertain, as gold has been consolidating in a tight range since its record peak in late October. Although it remains sharply higher year-over-year, thanks to geopolitical tensions, trade risks, and concerns about fragileening government finances, the outlook remains uncertain.

 From a technical perspective, the price of gold is plateauing around the support of the 50-day simple moving average, located in the $4,050 area. The Bollinger Bands, although contracted due to the volatility of the previous weeks, are still quite expanded, supporting any significant move in the short term. The Stochastic oscillator is in extreme oversold levels, hinting that a potential bullish correction might take place in the upcoming sessions. The moving averages are also validating an overall bullish trend in the market; therefore, the short-term outlook for gold might be slightly bullish. However, without any new catalyst in the market, the price may be bound to trade within a sideways range between $4,200 and $3,900.

Disclaimer: The opinions in this article are personal to the writer and do not reflect those of Exness or Finance Feeds.