Fundamentals, Oil & Gold
Oil Backtracks on Bearish Breakout, Metals Hint Downside
Monday, 30 Nov 2009 7:49 EST at 7:49 by Ilya Spivak · Leave a Comment
Commodities – Energy
Oil Backtracks on Bearish Breakout But Downside Still Favored
Crude Oil (WTI) $76.28 +$0.23 +0.30%
Oil seemed to have broken lower beyond support a falling channel that had contained prices since late October amid widespread selling of risky assets as news emerged that Dubai World may head into default. However, prices quickly rebounded as the UAE signaled support for both local and foreign banking institutions. Still, near-term technical positioning looks to favor the downside with prices at resistance marked by the top of a minor falling channel. A move below $74 would help to confirm a meaningful reversal. The US data docket offers only minor event risk with Chicago PMI and the Dallas Fed’s gauge of manufacturing activity set to hit the tape. Stocks are down in Europe and equity index futures are trading lower ahead of the opening bell on Wall St, bolstering the bearish scenario as crude continues to trade close with the broad outlook for risky assets.
Commodities – Metals
Metals Appear to Have Broken Decisively Lower – Will it Last?
Gold $1170.43 -$7.20 -0.61%
Gold seems to have broken lower out of a rising channel that had guided prices since mid-October with prices now re-resting this level on the upside as resistance. If the downside should remain the path of least resistance as volumes rebuild following the thanksgiving holiday, the next significant support lines up at $1152. Fundamentally, broad trends in risk appetite and the outlook for the US Dollar remain key, which at present seems to hinge on what investors perceive to the likely fallout from a default for Dubai World.
Silver $18.17 -$0.13 -0.72%
From a technical perspective, silver looks very similar to its more expensive counterpart. Prices have broken below a rising channel set from early November and are now re-testing that juncture to the upside. Continued downside sees near-term support at $17.77. As with gold, the broad trends in risk and the US Dollar are key on the fundamental side of things.
