Gold may rise with the S&P 500 as economic data hints the US
economy continued to improve in October. Crude oil looks to
inventory figures for direction.
Talking Points
- Gold, Silver May Rise with Stocks as Richmond Fed Survey
Buoys Sentiment
- Copper Technical Setup Boosts Likelihood of Bounce with
Overall Risk Trends
- Crude Oil Continues to Carve its Own Path, API Inventory
Report in Focus
Commodity prices continue to look toward US event risk for
direction cues as traders weigh the ability of a cautious pickup in
North America to offset sluggish performance in Europe and Asia. On
the economic data front, the focus is on the Richmond Fed
manufacturing activity gauge. Expectations call for an improvement
in October, hinting the positive cues seen in September's releases
are carrying forward. Turning to the earnings docket,
cycle-sensitive names with a global footprint including United
Parcel Service, EI du Pont de Nemours and Ryder System are in focus
as markets continue to fine-tune their global growth outlook.
On balance, a risk-supportive mix of releases stands to boost
gold and silver , where prices
continue to track broad-based sentiment trends
(reflected in a significant correlation with the S&P 500).
Copper prices are likewise positioned to take advantage of such a
scenario as correlation studies suggest the influence of risk
appetite is reasserting itself. Needless to say, disappointing
results on the data and/or earnings sides of the equation stand to
produce the opposite results.
Crude oil continues to stand aside from the broader
risk-on/risk-off dynamic guiding many benchmark assets across the
financial markets. With that in mind, the
weekly set of inventory figures from API
may prove more significant. The monthly trend has pointed to a
steady build in crude stockpiles since mid-August. A reinforcement
of this dynamic may apply pressure to the WTI contract as prices
approach technical support (see below) and may force a breakout.
Alternatively, a meaningful drop may offer a lifeline after two
days of aggressive selling.
WTI Crude Oil (NY Close): $ 88 . 65 // - 1 . 79 // - 1 . 98
%
Prices continue to consolidate above support at 87.66, the 38.2%
Fibonacci expansion. Resistance is at 92.25, marked by a falling
trend line established from late September, with a break above that
targeting a larger downward-sloping barrier set from the February
top, now at 97.90. Alternatively, a drop through support exposes
the 50% level at 83.76.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1728.50 // +6.75 // +0.39%
Prices continue inch lower
as expected
following the formation of a bearish Dark Cloud Cover candlestick
patter. Sellers have taken out support in the 1732.33-35.65 area,
marked by a horizontal pivot level and the 23.6% Fibonacci
retracement, exposing the 38.2% level at 1693.06. Resistance is at
1737.99, a falling trend line set from the October 5 swing high. A
break above that targets 1777.32.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
Spot Silver (NY Close): $32.42 // +0.34 // +1.07%
Prices are inching lower
as expected
after completing a Bearish Engulfing candlestick pattern coupled
with negative RSI divergence below the 35.00 figure. Sellers are
now testing support at 31.83, the 38.2% Fibonacci retracement. A
break below that exposes the 50% level at 30.74. Resistance is at
the top of a falling channel set from October's swing top (32.71),
with a push above that targeting the 23.6% Fib at 33.19.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
COMEX E-Mini Copper (NY Close) : $3. 622 // -0. 016 // - 0 . 44
%
Prices broke support at 3.695, the 23.6% Fibonacci retracement,
exposing the 38.2% level at 3.608. A Spinning Top candle warns of
indecision and hints a bounce may be ahead. The 3.695 level has
been recast as resistance, with a push back above that exposing a
falling trend line set from the September 14 high (now at 3.755).
Alternatively, a break below support targets the 50% level at
3.537.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for
Dailyfx.com
To contact Ilya , e-mail ispivak@dailyfx.com . Follow Ilya on
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@IlyaSpivak
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