Fundamentals, Oil & Gold
Oil, Gold Continue Taking Cues from Stock Performance
Thursday, 4 Feb 2010 4:56 EST at 4:56 by Ilya Spivak · Leave a Comment
Commodities – Energy
Oil Prices Meet Resistance, Risk Trends Remain Top Catalyst
Crude Oil (WTI) $76.66 -$0.32 -0.42%
Prices are stalling ahead of resistance at $77.54, with a turn lower seeing initial support at $75.42 while a push higher will clear the way for a test of the $79 figure. Crude’s correlation with the MSCI World Stock index remains formidable at 0.87, suggesting risk sentiment remains the primary driver of price action. Directional cues are mixed as contracts European exchanges tick higher while futures tracking US benchmark indexes are slightly in the red ahead of the opening bell. The economic calendar looks supportive of further gains with weekly US Jobless Claims figures set to print lower while Factory Orders rise for the fourth consecutive month in December, albeit at a slightly slower pace. The earnings calendar may prove critical with a number of top names including Mastercard Inc, CME Group Inc, and Moody’s all set to report fourth-quarter results.
Commodities – Metals
Gold, Silver Continue Taking Cues from Stock Performance
Gold $1105.79 -$4.02 -0.36%
Gold’s near-term correlation with the MSCI World Stock index has faded a bit in recent days but still remains formidable with a reading of 0.89, suggesting risk trends remain a key driver of price action. This means that as with oil, the US economic and earnings calendar are critical to watch for the time being. A falling channel has been breached to the upside with resistance found at $1117.90. Support stands at $1099.39, the broken channel’s top.
Silver $16.27 -$0.10 -0.61%
Silver has turned lower once again, with a Bearish Engulfing candlestick formation on the 8-hour chart below resistance at the $17.00 figure pointing to continued selling. The $16.00-16.15 region marks near-term support. The correlation with the MSCI World Stock index is at a very strong 0.98, meaning the path of equities remains the pace-setter for price action.
