Fundamentals, Oil & Gold

Gold Surges to $1200, Oil Extends Rebound

Commodities – Energy

Oil Extends Rebound, US Housing and Inventories Data Key Ahead

Crude Oil (WTI)       $77.99       +$0.71       +0.92%
Oil broke above near-term resistance at the top of a minor falling channel and the door is now open to challenge the upper boundary of a the longer-term downward-slopping channel in place since late October near the $79 mark. The data docket offers plenty of opportunities for volatility with US Pending Home Sales and Construction Spending both set to decline in October. US builders are the world’s largest consumer of crude, so losses here may act to check recent moves to the upside. Inventory figures from the American Petroleum Institute are also due for release. Risk-taking seems well supported with European stocks adding about 2% and US equity index futures firmly in positive territory.

Commodities – Metals

Gold Pushes to New Record High, Silver Diverges

Gold       $1194.94        +$15.35       +1.30%
Gold has pushed to new highs, testing the all-important psychological barrier at $1200. However, relative strength studies are negatively divergent with recent highs, hinting at lackluster momentum behind the most recent push. Fundamentally, the risk appetite landscape is key going forward. To that effect, higher equities in Europe and gains on US equity index point higher for the momentum, though a hefty dollop of US economic data could change things rather quickly.

Silver       $18.73       +$0.24       +1.30%
Silver has diverged from its more expensive counterpart as it hits record highs. Overall positioning looks as it did yesterday, with prices re-testing support-turned-resistance at the bottom of a rising channel set from early November. A reversal lower sees near-term support at $17.77. The broad outlook for risky assets and the US Dollar is central from a fundamental perspective.