Oil Stalls at $82, Metals Push Higher Ahead of Fed Minutes

Commodities – Energy

Crude Looks to Fed Minutes as Catalyst Ahead of Critical $82 Level

Crude Oil (WTI)        $81.82       +$0.50       +0.06%
Oil prices have paused ahead of major resistance below the $82 level, hinting that a double top may be in the works. Minutes from the last meeting of the US Federal Reserve headline the economic calendar, with traders looking for validation of the recent upgrade to the priced –in US yield outlook after December’s economic data took a decisive turn for the better. This stands to boost prices amid hopes of a speedier recovery for the world’s largest crude consumer, but a downward correction in the near-term may still be possible if traders perceive that their view of the US central bank’s time-table for raising rates has become rosier than is reasonable over recent weeks, with a downswing seeing initial support at $81.06.



 

Commodities – Metals

Gold Takes Out Key Resistance, Silver Tests Above $18

Gold       $1129.58       +$11.58       +1.04%
Gold prices looks to have taken out resistance at the top of a rising channel set from the lows in late December, with prices now aiming to challenge $1141.88. The metal retains a significant inverse correlation with the outlook for US monetary policy for the coming year (as expressed by the spread between Dec’2010 and Mar’2010 fed funds futures), so the release of the minutes from the last Federal Reserve meeting may prove to set off significant volatility.

Silver        $17.99       +$0.20       +1.12%
Silver prices have continued to soar, taking out support-turned-resistance at $17.79 and now targeting the $18.35 level. As with gold, a significant inverse correlation with the 2010 fed funds futures spread will mean that today’s Fed minutes release will be very closely watched.