Fundamentals

Oil, Metails to Gain With Risky Assets as Equity Index Futures Rise

Commodities – Energy

Oil May Continue to Gain With Risky Assets as Equity Index Futures Rise

Crude Oil (WTI)       $78.48       +$1.01       +1.30%
Broad trends in risk appetite are taking center stage for now with nothing of particular significance on the economic calendar. The US Dollar backed off to start the trading week as stocks surged in thin Asian trading (Tokyo was closed for the Labor Thanksgiving holiday) after building materials maker James Hardie Industries said its full-year profit will be close to the top of the range of analysts’ forecasts at $115 million. Dollar weakness, in turn, has translated into crude strength, with prices pushing above the $78 mark. Broad technical positioning is slightly bearish, with the daily chart showing a falling channel that has confined trading since October. Equity index futures are pointing higher ahead of the opening bell in Europe, hinting crude is likely to continue higher with risky assets for the time being.

Commodities – Metals

Gold, Silver Trade with Risky Assets as Stock Gains Weigh on US Dollar

Gold        $1166.60        +$16.00       +1.39%
Gold prices hit a fresh record high on the back of renewed US Dollar weakness in Asian trading as buoyant stock markets weighed on demand for the safety-correlated greenback. With European equity index futures up over 1% and their US counterparts up 0.5%, more of the same seems likely at least until the US comes online late into the session. Technically, significant resistance lines up at $1177.43, the top of the rising channel that has guided prices higher since late October.

Silver       $18.87       +$0.37       +2.00%
As with gold, the key catalyst for now is the rally in equity markets and the accompanying weakness in the US Dollar. Prices are testing major technical resistance above the upper boundary of a channel that had guided trading since mid-September en-route to the psychologically significant $19.00 level. A sustained break above that opens the door for a run at multi-decade highs below $21.35.