Commodities – Energy
Oil Prices Correct Lower, NFP Takes Center Stage
Crude Oil (WTI) $82.49 -$0.17 -0.21%
Oil prices have come off a bit, slipping below the $83 level on bounce lower from resistance at the top of a rising channel that had guided trading since the swing lows of mid-December. Initial support lines up at $81.78. December’s US Nonfarm Payrolls report, set to cross the wires at 13:30 GMT, is easily the only catalyst of real significance. The median forecast of economists polled by Bloomberg calls for the figures to reveal the first month without job losses in two years, which stands to boost the market’s expectations of recovery in the world’s top oil-consuming economy and send crude rates higher.
Commodities – Metals
Gold Pulls Back, Silver Stalls Ahead of US Jobs Data
Gold $1124.35 -$7.25 -0.64%
As with oil, gold prices corrected lower after a test of horizontal support-turned-resistance at $1141.05 in the run-up to December’s NFP report. The metal continues to have a significant inverse correlation with the outlook for US interest rates (as expressed by the spread between Dec’2010 and Mar’2010 fed funds futures). This threatens to sink prices if positive labor market figures bolster investor’s expectations of US economic recovery, hinting that the Fed may move quicker toward reversing the extremely loose monetary conditions put in amid the global credit crunch.
Silver $18.14 -$0.09 -0.51%
Silver proved somewhat more resilient than its more expensive counterpart, with prices stalling rather than pulling back at resistance marked by the $18.35 level in the hours before the NFP report. Here too, significant inverse correlation with the spread between December and March 2010 fed funds futures makes the metal vulnerable heading into the end of the week. A move lower will see initial support at $17.79.
For real time news and analysis, please visit http://forexstream.dailyfx.com
To receive future articles by email, please contact Ilya at ispivak@dailyfx.com
DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.
