Oil Advancing Toward $80, Gold and Silver Find Support

Commodities – Energy

Oil Continues to Grind Higher, $80 Close Ahead

Crude Oil (WTI)       $79.58       +$0.30       +0.38%
Oil prices continued higher after taking out resistance at $79.04 and are now on pace to move in for a test of the psychologically significant barrier at the $80 level. Weekly US jobless claims figures top the economic calendar, with an expected increase this time around offering the possibility of a corrective pullback ahead of the New Year holiday.




Commodities – Metals

Gold, Silver May Extend Rebound on US Jobless Claims Data

Gold       $1098.03       +$5.13       +0.47%
Gold prices are little changed heading into the final day of trade of trade before the New Year holiday, with prices recovering a bit to position for a re-test of the psychologically significant $1100 handle. The metal retains a strong inverse correlation with the outlook for US monetary policy (as expressed by the spread between Dec’2010 and Mar’2010 fed funds futures), which has recently forced losses on steadily improving US data. This relationship may start to offer prices a bit of support as weekly US jobless claims data shows a narrow increase.

Silver       $16.93       +$0.12       +0.71%
Prices found a bit of support at the bottom of a falling channel established earlier this month and have moved up towards a re-rest of the $17.00 handle on the upside. As with gold, a significant inverse correlation with the 2010 fed funds futures spread will mean that US jobless claims figures are the top fundamental catalyst to watch into the week-end.




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