Crude Oil Tumbles on Dismal Data, Gold Uptrend Back in Full Force

Commodities – Energy

Crude Oil Tumbles on Dismal Data

Crude Oil (WTI) - $74.45 // $0.02 // 0.03%

Commentary: A significant drop in equity markets sent crude oil tumbling on Thursday. The commodity fell $0.99, or 1.31%. Markets are now intensely focused on the U.S. economy and the likelihood of a double dip recession. Economic readings only bolstered the bears’ case, as jobless claims surpassed 500,000 for the first time since November 2009 and the Philadelphia Fed survey actually indicated contraction in the manufacturing sector in the Philly area for the first time since July. Look for the economic outlook to continue to drive prices for equities and crude oil in the near-term.

Technical Outlook: Prices have taken out the bottom of a rising channel established since late May clearing the way for move lower to challenge $72.07. Near-term resistance lines up at the $75.00 figure.

Commodities – Metals

Gold Uptrend Back in Full Force

Gold - $1231.90 // $0.25 // 0.02%

Commentary: Gold rallied once again on Thursday, advancing $2.70, or 0.22%. As crude oil has been falling due to the concerns regarding the U.S. economy, gold has been rallying for precisely the same reason. Gold ETF holdings increased again, this time by nearly 150,000 troy ounces, bringing to total to 66.44 million troy ounces. Holdings are now approaching the record levels of 66.81 million set in July. With economic uncertainty persisting and ETF holdings increasing swiftly, the long-term uptrend in gold is back in full force.

Technical Outlook: Prices have extended gains toward horizontal resistance at $1243.27 having taken out the barrier at $1215.47, which has now been re-cast as support.A break past this boundary exposes the record high at $1265.30.

Silver - $18.28 // $0.02 // 0.12%

Commentary: Silver decoupled with gold for a second day, as traders put a premium on the more prominent metal. The gold/silver ratio increased to 67.37, as it gets closer to the top of the 2010 range of 60 to 71.

Technical Outlook: Prices continue to test the upper boundary of a descending triangle chart formation that has confined spot since mid-May (now at $18.54). The barrier is reinforced by resistance at $18.70, the 8/4 wick high. A break higher would expose the $19.00 figure and $19.25, the downside is underpinned by supports at $18.00 and $17.79.

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