Crude oil prices attempted to launch a recovery – rising to a three-day high – but the advance was aborted as the EIA projected that US shale output will rise to a record 5.48 million barrels per day in July. That continued to undermine confidence in the ability of an OPEC-led supply cut effort to offer lasting support.

Looking ahead, traders will weigh up API inventory flow data against the OPEC monthly report to gauge the balance of forces shaping the supply/demand balance. The former will be sized up against official DOE data expected to show a 2.2 million barrel draw on the following day.

Gold prices marked time, with investors probably unwilling to commit to a directional bias ahead of the FOMC rate decision. More of the same is probably in the cards ahead unless another swell in US political uncertainty fears rattles markets.

US Attorney General Jeff Sessions will testify before the Senate Intelligence Committee today as allegations of improper contact between the Trump campaign and Russian officials linger. Comments deepening the turmoil may trigger risk aversion, pushing yields lower and boosting gold by extension.

GOLD TECHNICAL ANALYSIS – Gold prices paused to digest losses after seemingly establishing a double top below the $1300/oz figure. From here, a daily close below 1260.85 targets another chart inflection point at 1241.20. Alternatively, a move back above trend line support-turned-resistance, now at 1278.04 exposes the double top at 1295.46 anew.

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices continue to consolidate near the $46/bbl figure. A daily close below support at 45.32 targets 43.79 (May 5 low, falling channel floor). Alternatively, a reversal back above the chart inflection point at 47.12 exposes the channel midline at 47.86.