Fundamentals, Oil & Gold
Crude Oil, Metals Face Dense US Economic Calendar
Tuesday, 15 Dec 2009 3:55 EST at 3:55 by Ilya Spivak · Leave a Comment
Commodities – Energy
Crude Oil Volatility Likely on Dense Economic Calendar
Crude Oil (WTI) $69.49 -$0.02 -0.03%
Crude prices look to have broken lower out a corrective rising channel to meet minor support at $69.46. A break lower will open the door for a decline to $68.96. Near-term resistance lines up at $69.59, the broken channel bottom. Beyond that, the bulls face a significant barrier at the $70 level. The economic calendar is packed with fundamental event risk: producer prices are set to advance, which could weigh on prices by feeding gains in the US Dollar as traders continue to re-price their outlook for the Fed monetary policy; however, improving industrial production and NAHB Housing Market Index figures may prove supportive. Inventory figures from the American Petroleum Institute are also on tap.
Commodities – Metals
Gold Positioned to Extend Losses But Silver May Diverge
Gold $1118.85 -$7.85 -0.70%
Prices continue to grind their way through support in the $1111.20-1123.38 congestion region, with a push below that clearing the way for a test of $1100. A falling channel is guiding the move lower, with prices now on their way down having tested the formation’s upper boundary. The spread between March 2010 and December 2010 90-day fed funds futures has retained a strong inverse correlation with gold prices, hinting that the outlook for US interest rates next year remains the key catalyst from the fundamental side of things. This means the upcoming PPI release is likely to be of particular significance, with an upside surprise offering continued impetus for bearish momentum.
Silver $17.23 -$0.16 -0.89%
Silver is testing support at $17.02, but positive RSI divergence hints that an upswing may be ahead before the bears can regain momentum. Initial resistance is seen at $17.76, while a break lower will open the door for a decline to $16.74. Fundamentally, the landscape is much the same as that of gold, with the US rates outlook being of primary importance.
