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

This preview of weekly data looks at USOIL and XAUUSD, where economic data coming up later this week are the main market drivers for the near-term outlook. 

Highlights of the week: ECB interest rate, US & China inflation, UK GDP

Wednesday

• Chinese inflation rate at 01:30 AM GMT. The market consensus is for a decline going from 0% to -0.2% for the month of August. 

• U.S. Producers Price Index (PPI) at 12:30 GMT. Market participants are expecting the figure to come out at 0.3% over 0.9% of the previous reading. If this is confirmed, it could hint at lower inflation figures in the coming months. 

Thursday

• ECB Interest rate decision at 12:15 GMT. The market consensus is that the central bank of Europe will take a pause at 2.15%. If there is a surprise rate hike, then the Euro might find support against other major currencies, while a cut might create some losses in the short term. Investors and traders are rather focused on the subsequent press conference following the release, which will focus on getting possible insights on the monetary policy steps ahead.
• US Inflation rate at 12:30 GMT: The consensus is for an increase of around 0.2%, reaching 2.9% for the month of August. If this is broadly accurate, then it might not influence a change in the stance of the Federal Reserve at their next meeting, where the probability for now is that they will proceed with a cut. If there is any significant surprise change in the actual figure, then it will affect the dollar in the short term. 

Friday

• British GDP growth at 06:00 AM GMT is expected to drop from 1.4% to 1.1%, and the monthly figure from 0.4% to 0%. If these expectations are confirmed, then the pound might witness some short-term losses against other currencies traded against.

USOIL, daily

Oil prices ticked higher later than OPEC+ approved a modest production increase, reversing earlier cuts and signaling a shift toward market share over price support. While the hike was smaller than in previous months, questions remain over whether members can deliver the extra supply, with some facing limits on output. Geopolitics and China’s stockpiling provide temporary support, but traders are watching inventory data and compliance closely as oversupply risks point to renewed volatility ahead.

 On the technical side, the price of crude oil has found sufficient support around the $62 area, which has been a price reaction area since mid-August. The moving averages crossed last week, validating the bearish shift in the market, while the Bollinger bands are still quite expanded, showing that there is volatility to support any significant moves in the short term. The Stochastic oscillator viewms to be rebounding from the extreme oversold levels, hinting that the recent sideways movement can project to the upcoming sessions if no major catalyst takes place. 

Gold-dollar, daily

Gold extended gains near record highs as fragile US jobs data reinforced expectations of a Federal Reserve rate cut this month. Traders now view a strong chance of easing, while continued central bank demand, including fresh purchases by the People’s Bank of China, adds further support. Attention shifts to upcoming US PPI data, which could influence the dollar and gold’s near-term direction.

 From a technical point of view, the price of gold has reached a new all-time high later than trading in a sideways channel for the past 3 months. The moving averages are also validating the bullish trend, while at the identical time the Stochastic oscillator is in the extreme overbought levels for almost 2 consecutive weeks, hinting that a bearish correction might take place in the upcoming sessions. For the time being, the Bollinger bands are quite expanded, showing that there is increased volatility in the market of gold, making any significant moves in the short term probable.

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