Fundamentals, Oil & Gold

Oil Slips Below $80, Metals Consolidate in Familiar Ranges

Commodities – Energy

Crude Slips Below Key $80 Level, Outlook Still Linked Risk Trends

Crude Oil (WTI)       $79.93       -$0.57       -0.71%
Crude prices slipped below the key $80 level, and from a technical perspective, the door is now open for a move to test support just above the $78 mark. The fundamental picture looks supportive of further losses: the Baker Hughes measure of rigs operating in the US rose to the highest since March last week while crude inventories have been trending steadily higher since June, pointing to abundant supply and that should be weighing on prices. However, broad trends in risk appetite across the capital markets’ landscape has proven to be a far more important driver of the WTI contract, so traders will be paying close attention to third-quarter earnings reports from German pharmaceutical giant Merck KGaA and US telecommunications powerhouse Verizon Communications. US equity index futures are trading 0.3% higher ahead of the opening bell in Europe, suggesting risky assets may continue to advance and hinting that crude may not remain below $80 for too much longer.

Commodities – Metals

Gold, Silver Look to Equities and the Dollar for Direction Cues

Gold       $1055.70       +$0.35       +0.03%
As with crude oil, gold prices are likely to find their most potent catalyst in the overall trajectory of risk appetite. To that effect, the aforementioned earnings reports will probably be of greatest interest in the day ahead. Technically, prices continue to consolidate in the familiar $1045 – $1068 range, with minor support at a rising trend line just above $1050.

Silver       $17.70       +$0.02       +0.08%
As with gold, silver continues to consolidate and will look to risk trends as the catalyst for directional momentum. Technically, a descending triangle looks to be forming above the key $17.15–24 support region, hinting at bearish bias that favors a break below the $17 handle to challenge $16.75.