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Commodities Brief – Precious metals rally on weak US data, crude falls below 91.00
With investors tuned into the impending situation surrounding
the sequestration, gold prices has spent European trading
entrenched in negativity. Indeed, the yellow metal bottomed out at
1564.45 (intraday minimum), however the publication of very weak
economic data in the United States cast doubt on the economic
strength, thought to be so optimistic as recently as yesterday
afternoon. At the onset of the US open, gold prices have recovered
and pared all of their losses, storming back above their 20, 50 and
200-SMA en route to 1587.05 (intraday maximum) - in these moments
however, the price has eased slightly to USD $1582.85 per oz.
Silver pares losses after beaching 28.00 level
Silver had experienced a similar cataclysmic fall Friday, as European trading took the prices as far down as 27.97, before heavy support reinforced the white metal. With compound situation of the sweeping budget cuts and poor US data, silver has engineered a reversal, having settled at USD $28.63 per oz. in these moments. As American trading begins to get underway, any updates or abandonment of the negotiation process in Washington has the potential to mold investor confidence, which should affect precious metals - seen as the safe haven.
Crude falls sharply
WTI Crude did not receive the same memo that its other commodity counterparts were in a recovery rally. Earlier today, during the afternoon of European trading, crude prices lost their grip on the 91.00 level, falling as low as 90.58 (session low) in recent minutes. Friday has not been kind to crude, and at the time of writing prices have settled at USD $90.72/bbl.