Fundamentals, Oil & Gold

Oil and Metals May See Support from US Data, Dollar Correction

Commodities – Energy

Crude Prices May See Support from US Housing, Durable Goods Data

Crude Oil (WTI)        $79.30       -$0.25       -0.31%
As expected, crude oil prices corrected higher to re-test the $80/barrel level and have been consolidating between this and support at the $78 mark. A break lower targets just below $77. Fundamentally, the US economic calendar looks compelling with New Home Sales and Durable Goods Orders for September on tap for release. Improvements are expected on both fronts and may boost prices considering the US construction sector is the world’s top consumer of crude oil while a rise in the demand for durables may reveal higher vehicle sales and thereby point to greater fuel demand. Third-quarter earnings reports from tire maker Goodyear and oil giant ConocoPhillips may also prove market moving.

Commodities – Metals

Gold, Silver May See Support from ArcellorMittal Earnings, US Dollar Correction

Gold       $1037.40       -$2.65       -0.25%
Gold positioning is largely unchanged from yesterday, with prices consolidating between near-term support above $1037 and the pierced bottom of a channel that had contained trading for most of this month. Fundamentally, a bit of upside momentum may emerge after the release of better-than-expected third quarter earnings from steelmaker ArcellorMittal offer a broad boost to commodities in general and metals in particular. The aforementioned US economic data releases will help guide risk trends and the US Dollar, thereby extending their effects to gold rates late into European trading. The greenback has chalked up four consecutive up days and a bit of a correction may be due.

Silver       $16.62      -$0.08        -0.48%
Silver prices validated yesterday’s technical outlook, racing lower to find support near $16.75, the 9/30 swing high. Fundamentally, the broad trajectory of risk sentiment is likely to dominate. Near-term support lines up in the $16.40-16.50 region, with a sustained push below that opening the door for a move to test the monthly low at $15.90. Any significant help from the ArcellorMittal earnings report or US Dollar weakness may force a re-test the $17 mark, especially considering momentum readings are now in oversold territory.