Gold and silver may continue to rebound as improving US economic
data stokes inflation-hedge demand while crude oil and copper
capitalize on a weaker Dollar.
Talking Points
- Gold, Silver May Continue Higher as US Data Stokes
Inflation-Hedge Demand
- Crude Oil and Copper to Rise if Sentiment Rebound Continues
to Punish Dollar
The focus remains on the US economic calendar, where October's
Philadelphia Fed gauge of manufacturing activity and September's
Leading Indicators composite are on tap. Improvements are expected
on both fronts. This may further buoy gold and silver as signs of a
pickup in US growth against a backdrop of ultra-loose Federal
Reserve monetary policy drive inflation-hedge demand for precious
metals.
Crude oil and copper may likewise find support in a firmer US
data set. While correlation studies suggest the relationship
between the typically cycle-sensitive commodities and the S&P
500 - a benchmark gauge for market sentiment - has significantly
weakened recently, de-facto upward pressure may emerge nonetheless
if an encouraging data set weighs on haven demand for the US Dollar
.
In the meantime, sentiment hinges on commentary emerging from
the EU leaders' summit beginning today in Brussels.
Meaningful breakthroughs on core issues appear
unlikely
but traders will nonetheless pay attention to the tone of rhetoric
emerging from the sidelines of the sit-down to help establish the
trajectory of EU policy efforts.
WTI Crude Oil (NY Close): $92.12 // +0.03 // +0.03%
Prices are testing resistance at the would-be neckline of an
inverse Head and Shoulders bottom (92.34), with a break higher
implying a measured upside target at 97.80. Support stands at
87.66, the 38.2% Fibonacci retracement. A drop below that targets
the 50% level at 83.76.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $17 50 . 15 // + 2 . 5 5 // +0. 1 5%
Prices are correcting higher after finding support at 1732.33,
the 23.6% Fibonacci retracement. Initial resistance stands at the
underside of a previously broken Rising Wedge pattern (now at
1770.86). A break above that targets the 1790.55-1802.80 area.
Alternatively, a reversal below support targets the 38.2% Fib at
1693.06.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
Spot Silver (NY Close): $3 3 . 22 // +0.2 7 // +0. 83 %
Prices are correcting higher to retest support-turned-resistance
at 33.18, 23.6% Fibonacci retracement. This is reinforced by former
range bottom support at 33.66, with a push back above the latter
level targeting the 35.00/oz figure anew. Alternatively, renewed
downward momentum aims to challenge support at 31.83, the 38.2%
level next.
Daily Chart - Created Using FXCM Marketscope 2.0
Want to learn more about RSI?
Watch this Video
COMEX E-Mini Copper (NY Close) : $3.748 // +0.048 // +1.30%
Prices bounced from support at 3.695, the 23.6% Fibonacci
retracement, with the bulls looking to challenge the top of a
falling channel set from mid-September (3.763). A break above that
targets falling trend line resistance at 3.814. Alternatively, a
break below support targets the channel bottom at 3.652 and the
38.2% level at 3.608.
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
Twitter at
@IlyaSpivak
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