Gold prices managed a second day of corrective gains after Tuesday’s sell-off. The lion’s share of intraday gains evaporated as renewed risk aversion buoyed the US Dollar however, sapping the appeal of the perennially anti-fiat yellow metal.

Risk aversion sank crude oil prices however. Investors’ mood soured amid continued worries about instability in emerging market assets as Fed tightening drives funding stress. MSCI gauges tracking shares and currencies in the sector tellingly plunged in tandem.

UPBEAT US JOBS DATA MAY HURT COMMODITY PRICES

Looking ahead, US labor market statistics are in focus. A pickup in job creation is expected, with the economy adding 191k jobs in August after a 157k increase in the prior month. The jobless rate is seen falling to 3.8 percent, revisiting an 18-year low.

Wage inflation might dominate the spotlight however. Leading PMI surveys point to shortages of suitable candidates to fill vacancies across the nonfarm sector, coupled with the follow-on rise in labor costs. If that translates into an unexpected pickup in average hourly earnings growth, Fed rate hike bets may swell.

The US Dollar is likely to rise in this scenario, compounding pressure on gold prices. Crude oil prices may likewise decline as the stronger greenback amounts to a de-facto headwind for assets priced in terms of the benchmark currency on global markets.

GOLD TECHNICAL ANALYSIS

Gold prices continue to digest losses after breaking counter-trend support to hint the dominant downtrend has resumed. A daily close below the August 24 low at 1183.28 opens the door for a retest of the swing bottom at 1160.37. Alternatively, a move back above the August 28 high at 1214.30 exposes the 1235.24-41.64 area anew.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices dropped to challenge support guiding the uptrend since early February. A daily close below its lower boundary – now at 65.25 – sees the next downside barrier at 61.84. Resistance remains in the 70.15-41 area, with a reversal above that targeting the inflection point at 72.88.