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Gold, Crude Oil May Rebound on US 4Q GDP Upgrade

By , Currency Strategist
28 February 2013 11:47 GMT

Commodity prices are lagging firming risk appetite but an upward revision may spark a catch-up advance, with oil chasing stocks higher as gold gains on stimulus bets.

Talking Points

  • Crude Oil, Copper May Follow Risk Trends Higher on US GDP Upgrade
  • Gold and Silver Have Scope to Recovery on Global Stimulus Outlook

Commodity prices are showing notably mixed cues in European trade despite a pickup in risk appetite across European stock exchanges on the back of global monetary stimulus outlook. The Fed’s Ben Bernanke and the ECB’s Mario Draghi both signalled a commitment to continued accommodation while Japan’s Shinzo Abe formally nominated vocally dovish Asian Development Bank President Haruhiko Kuroda to take over as Governor of the BOJ.

Reticence may evaporate after revised fourth-quarter US GDP figures cross the wires however. Economists’ forecasts point to a revision higher, showing the economy added 0.5 percent. Initial estimates showed output shrank 0.1 percent. The outcome is likely to be interpreted in the context of the looming “sequester” spending cuts set to trigger on Friday, with a relatively firm result set to boost risk appetite amid hopes the world’s top economy will be able to withstand another dose of austerity.

WTI Crude Oil (NY Close): $92.76 // +0.13 // +0.14%

Prices are retesting support-turned-resistance at 92.80, the 38.2% Fibonacci retracement. A break back above this barrier exposes the 23.6% level at 94.87. Near-term support is at 91.13, the 50.0% Fib, with a drop beneath that targeting the 61.8% retracement at 89.45.

ommodities_Gold_Crude_Oil_May_Rebound_on_US_4Q_GDP_Upgrade_body_Picture_3.png, Gold, Crude Oil May Rebound on US 4Q GDP Upgrade

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1597.40 // -16.45 // -1.02%

Prices recoiled from resistance at 1611.83, the 23.6% Fibonacci retracement, cutting short a four-day recovery. Near-term support is at 1590.16, the 14.6% level, with a break below that aiming for the February 21 low at 1555.00. Alternatively, a reversal above resistance aims for the 38.2% retracement at 1646.99.

ommodities_Gold_Crude_Oil_May_Rebound_on_US_4Q_GDP_Upgrade_body_Picture_4.png, Gold, Crude Oil May Rebound on US 4Q GDP Upgrade

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $29.02 // -0.39 // -1.31%

Prices are recoiling from resistance in the 29.42-62 area, marked by the 61.8% Fibonacci retracement and the June 6 close. Initial support lines up at 28.28, the 76.4% level, with a break below that exposing the June 28 2012 low at 26.11. Alternatively, a move through resistance aims for the 50% Fib at 30.70.

ommodities_Gold_Crude_Oil_May_Rebound_on_US_4Q_GDP_Upgrade_body_Picture_5.png, Gold, Crude Oil May Rebound on US 4Q GDP Upgrade

Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.568 // -0.016 // -0.45%

Prices are testing resistance at 3.580, the 23.6% Fibonacci retracement, after bouncing from a rising trend line set from early June. A break higher exposes the 38.2% level at 3.620. Trend line support is now at 3.514.

ommodities_Gold_Crude_Oil_May_Rebound_on_US_4Q_GDP_Upgrade_body_Picture_6.png, Gold, Crude Oil May Rebound on US 4Q GDP Upgrade

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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28 February 2013 11:47 GMT