Crude Oil Bias is Higher Following Break Out, Gold Direction Highly Uncertain

Commodities - Energy

Crude Oil Bias is Higher Following Break Out

Crude Oil (WTI)        $76.96       -$0.71        -0.91%
Crude oil is pulling back after rising almost 1% on Wednesday, as prices benefitted from momentum established in the prior session. While stock markets were hindered by poor economic readings on U.S. housing, crude was largely unaffected. The weekly inventory data provided little surprises; the surplus over the 5-year average stayed at 6.6% for the second week in a row. A summary of the inventory data and accompanying charts can be found in our crude oil inventory watch. From a technical perspective, the break above $75.50 has exposed $80.00 as the next level of resistance. On the downside, $75.50 is initial support.


                                                                                                                                                                                                    

Commodities - Metals

Gold Direction Highly Uncertain

Gold      $1233.05       +$1.10        +0.09%
Gold has regained almost all of Wednesday’s minor losses, but the bottom line is that volatility is declining as the current wedge formation plays itself out. The fact that gold has not already fallen from these levels so close to the all-time high is extremely telling . One would have expected that the recent increase in risk appetite that has benefitted the Euro and stock markets would have been a strong headwind for gold at the very least, perhaps even a catalyst for steep losses. That has not been the case, and that fact in itself leaves open the door for much higher prices. With that said, prices are still very close to initial support at the rising trendline near $1215. A break of that level leaves open the door to horizontal support near $1166.

Silver      $18.59        -$0.04        -0.22%
Silver has so far been unable to break the congestion resistance area between $18.50 and $18.80. A break, as we suggested yesterday, could lead to a move toward the recent highs near $19.83. Looking at the bigger picture, silver has been trapped in the current trading range for two months and the only catalyst that could break the metal out of its doldrums seems to be a large move in the price of gold. If prices begin to retrace, $18.00 and $17.50 provide support.


                                                                                                                                                                                                        
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