Fundamentals, Oil & Gold

Oil Gains on Chinese PMI, Metals Diverge Ahead of US ISM Data

Commodities – Energy

Crude Sees Support From Chinese PMI Data, US ISM On Tap Ahead

Crude Oil (WTI)       $78.02        +$1.02       +1.32%
Oil found support above 76.82 once again after HSBC released Chinese PMI figures showing the manufacturing sector continued to expand in October, offering a broad boost to commodities. Near-term resistance is seen at the familiar $78.17 level, with a push higher to target another push towards the psychologically significant $80 handle. October’s ISM Manufacturing survey and September’s Pending Home Sales figures as US data are likely to prove the most significant drivers of price action as US data continues to be primary pacesetter for investors’ perception of the global recovery, guiding market-wide appetite for risk.

Commodities – Metals

Silver Left to Consolidate as Gold Advances; Bulls Look to ISM for Catalyst

Gold       $1052.95       +$7.52       +0.72%
As with oil, gold prices got a boost from China’s October PMI release, pushing higher after a re-test of broken falling trend line resistance to surpass the $1050 level. Prices are now testing the upper boundary of a near-term rising channel and showing an Inverted Hammer candlestick, hinting that a move lower may be in the cards. The US ISM survey is the fundamental catalyst with greatest market-moving potential, with expectations calling for the highest reading in over 3 years. If this proves to force a bullish break higher, the path beyond current resistance is largely clear for a challenge of the triple top below $1068.

Silver       $16.56       +$0.25       +1.56%
Silver has lagged behind its more expensive counterpart with prices continuing to consolidate in a narrow range between $16.11 and $16.75. Positive divergence on the momentum studies may hint at a push higher, however, with traders looking to the US ISM report to set the trajectory of directional momentum.