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Commodities: Crude Oil, Gold May Rise on US Consumer Confidence

By , Currency Strategist
09 November 2012 09:48 GMT

Commodity prices may rise as US consumer confidence hits a 62-month high, boosting risk appetite and applying downward pressure on the US Dollar.

Talking Points

  • Commodity Prices Flat, Looking for Direction in Early European Trade
  • Crude Oil, Gold May Rise as US Consumer Confidence Stokes Risk Trends

Commodity prices are treading water in early European trade. A nudge higher into the end of the trading week may be ahead as traders look ahead to November’s gauge of US consumer confidence from the University of Michigan. Economists expect the index will edge up to 83.0, the highest reading since September 2007. Such an outcome may feed hopes that a firming US recovery will help offset downward pressure on global growth from a recession in the Eurozone and a slowdown in Asia, boosting risk appetite. In this scenario, sentiment-geared crude oil and copper prices are likely to rise along with stock prices while gold and silver find de-facto support on the back of waning haven demand for the US Dollar.

WTI Crude Oil (NY Close): $85.09 // +0.65 // +0.77%

Prices failed to hold up after poking above the 38.2%Fibonacci expansion at 87.66, revering lower to challenge the 50% expansion at 83.76 once again. A break below that exposes 80.00 figure and the 61.8% level at 7978. Alternatively, a push back above the 87.66 aims for falling trend line resistance at 90.94.

Commodities_Crude_Oil_Gold_May_Rise_on_US_Consumer_Confidence_body_Picture_3.png, Commodities: Crude Oil, Gold May Rise on US Consumer Confidence

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1731.45 // +13.70 // +0.80%

Prices are testing above resistance at 1732.33, the 23.6% Fibonacci retracement. A push above that targets the 1790.55-1802.80 area. Near-term support is at 1693.06, the 38.2% Fib, with a reversal back beneath that aiming for a rising trend line at 1681.23 followed by the 50% level at 1661.32.

Commodities_Crude_Oil_Gold_May_Rise_on_US_Consumer_Confidence_body_Picture_4.png, Commodities: Crude Oil, Gold May Rise on US Consumer Confidence

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

Spot Silver (NY Close): $32.33 // +0.51 // +1.59%

Prices are retesting the 38.2% Fibonacci retracement at 32.36, with a break above that exposing the 33.51-66 area marked by the 23.6% level and a former range bottom. Near-term support lines up at 31.43, the 50% retracement. A push back beneath that targets the 61.8% Fib at 30.50.

Commodities_Crude_Oil_Gold_May_Rise_on_US_Consumer_Confidence_body_Picture_5.png, Commodities: Crude Oil, Gold May Rise on US Consumer Confidence

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

COMEX E-Mini Copper (NY Close): $3.470 // +0.028 // +0.81%

Prices are testing support at a rising trend line set from early October 2011 (3.419). A break downward initially targets horizontal support at 3.300. Near-term resistance is at 3.526, the 23.6% Fibonacci retracement, with a piercing above that exposing the 38.2% level at 3.585.

Commodities_Crude_Oil_Gold_May_Rise_on_US_Consumer_Confidence_body_Picture_6.png, Commodities: Crude Oil, Gold May Rise on US Consumer Confidence

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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09 November 2012 09:48 GMT