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Commodities: Crude Oil, Gold Rise as Germany Approves Greek Deal

By , Currency Strategist
30 November 2012 13:06 GMT

Commodities are edging higher amid a broad pick-up in risk appetite after Germany approved the new Greece bailout deal. US “fiscal cliff” worries are now in focus.

Talking Points

  • Commodities Rise as Germany Approves New Greek Bailout Deal
  • “Fiscal Cliff” Chatter in Focus on Hopes for Emerging Compromise

Commodities are edging narrowly higher in European trade after Germany’s legislature approved the Greek rescue deal unveiled earlier in the week, boosting overall risk appetite. S&P 500 stock index futures are pointing higher ahead of the opening bell on Wall Street, arguing for more of the same as North American exchanges come online in the final hours of the trading week.

On the data front, October’s US Personal Income and Spending figures are in focus, with expectations pointing to moderation on both fronts that may pour a bit of cold water on investors’ chipper mood. On balance however, the larger issue remains the “fiscal cliff” fiasco.

Chatter from the sidelines of the negotiations to avert the sharp burst of austerity continue to capture traders’ attention, and reasonably so considering traders continue to look to a firmer recovery in the US with hopes for an offset to the malaise in Europe and Asia. With that in mind, signs of emerging compromise are likely to reinforce the risk-on mood, while comments pointing to deadlock stand to have the opposite effect.

WTI Crude Oil (NY Close): $88.07 // +1.58 // +1.83%

Prices bounced to retest rising trend line support-turned-resistance set from mid-October, now at 88.38, with a break above this level exposing the 23.6% Fibonacci expansion at 89.48.Near-term support is at 84.104, the November 7 low, with a break below that exposing the 80-50-81.43 area.

Commodities_Crude_Oil_Gold_Rise_as_Germany_Approves_Greek_Deal_body_Picture_4.png, Commodities: Crude Oil, Gold Rise as Germany Approves Greek Deal

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1725.70 // +5.95 // +0.35%

Prices turned lower after putting in a Bearish Engulfing candlestick pattern below the 61.8% Fibonacci retracement (1748.70), dropping to test the 38.2% level at 1719.60. A further push downward below that exposes the 23.6% Fib at 1701.60, a barrier reinforced by a rising trend line set from late June (now at 1698.66). Near-term resistance lines up at 1734.15, the 50% retracement.

Commodities_Crude_Oil_Gold_Rise_as_Germany_Approves_Greek_Deal_body_Picture_3.png, Commodities: Crude Oil, Gold Rise as Germany Approves Greek Deal

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

Spot Silver (NY Close): $34.24 // +0.48 // +1.43%

Prices are testing resistance at 34.18, the 38.2% Fibonacci expansion. A break above that exposes the 50% level at 35.29. Near-term rising trend line support is at 33.60 and is reinforced by the 23.6% Fib at 32.84. A drop below the latter level aims for the November 5 low at 30.65.

Commodities_Crude_Oil_Gold_Rise_as_Germany_Approves_Greek_Deal_body_Picture_2.png, Commodities: Crude Oil, Gold Rise as Germany Approves Greek Deal

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

COMEX E-Mini Copper (NY Close): $3.606 // +0.068 // +1.92%

Prices are testing above resistance at 3.620, the 50% Fibonacci retracement, and aiming to challenge the 61.8% Fib at 3.671.A break above the latter level exposes the 76.4% Fib at 3.734. Initial support lines up at 3.568, the 38.2% level, with a drop below that aiming the 23.6% Fib at 3.505.

Commodities_Crude_Oil_Gold_Rise_as_Germany_Approves_Greek_Deal_body_Picture_1.png, Commodities: Crude Oil, Gold Rise as Germany Approves Greek Deal

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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30 November 2012 13:06 GMT