Fundamentals, Oil & Gold
Oil, Metals Likely to Retrace Lower to End Trading Week
Friday, 30 Oct 2009 2:37 EDT at 2:37 by Ilya Spivak · Leave a Comment
Commodities – Energy
Crude Likely To Retrace Spike After US Q3 GDP Report
Crude Oil (WTI) $79.74 -$0.13 -0.16%
As we expected, the release of US Gross Domestic Product figures forced a bullish correction in oil prices as the world’s largest consumer of crude posted the first quarter of positive growth in a year. The extend of the rally has been markedly more pronounced than expected though, with the WTI contract blowing through support-turned-resistance near $78.17 to come up for a test of the $80 level. September’s Personal Income and Spending figures are on tap tomorrow with monthly declines expected on both fronts. Between this and the fact that the GDP outcome has now had ample time to be digested, it seems unlikely that traders will see too much bullish follow-through. Third-quarter earnings from Chevron Corp present a wild card, but US equity index futures are firmly lower trading down -0.5% so absent a very impressive figure, profit-taking is likely. A pullback sees near-term support above the $78 mark.
Commodities – Metals
Gold, Silver Position to Turn Lower After Post-GDP Advance
Gold $1045.50 -$1.50 -0.14%
As with oil, gold prices got a boost from the third-quarter US GDP report and surged higher to re-test support-turned-resistance at the bottom of the range that had contained prices for most of the month (near $1045-$1050). Also in line with crude, prices are likely to come off on the back of US data and a bit of profit-taking into the end of the week. Equity index futures are trading lower ahead of the opening bell in Europe, bolstering the near-term bearish scenario.
Silver $16.58 -$0.10 -1.60%
Silver technical positioning looks much cleaner than that of oil or gold: Prices bounced from support just above $16 to neatly re-test resistance at $16.75 and are now showing a Bearish Engulfing at this juncture. A move back down towards $16 looks very plausible from here.
