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Crude Oil, Gold May Rise if US Jobs Data Outperforms

By , Currency Strategist
08 March 2013 09:56 GMT

Crude oil and gold may rise on improving risk appetite and swelling anti-fiat demand if February’s US employment report tops expectations.

Talking Points

  • Crude Oil and Copper May Rise with Risk Appetite on US Jobs Data Surprise
  • Gold, Silver May Advance on Increase in US Growth and Inflation Expectations

All eyes are on February’s US Employment report through the end of the trading week. Consensus forecasts suggest the economy added 165,000 jobs in February, a print broadly in line with the 12-month trend average of 168,000 that ought not to offer much fuel for volatility around financial markets. US economic data has markedly improved relative to expectations since early February however, leaving the door open for an upside surprise.

Such an outcome stands to boost hopes for the resilience of US economic recovery in the face of strengthening fiscal headwinds following the triggering of “sequester” spending cuts last week. That may boost market-wide risk sentiment, boosting cycle-sensitive crude oil and copper prices. Gold and silver may likewise rise as an improvement on the US growth front within the context of a recommitment to loose monetary policy from Fed Vice Chair Janet Yellen earlier in the week boosts inflation expectations.

WTI Crude Oil (NY Close): $91.56 // +1.13 // +1.25%

Prices bounced after putting in a bullish Piercing Line candlestick pattern. Buyers are testing initial resistance at 91.43, the 23.6% Fibonacci retracement. A break above that targets the 38.2% level at 92.73. Near-term support is at 89.34, the March 4 low.

Commodities_Crude_Oil_Gold_May_Rise_if_US_Jobs_Data_Outperforms_body_Picture_3.png, Crude Oil, Gold May Rise if US Jobs Data Outperforms

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1578.97 // -4.93 // -0.31%

Prices continue to consolidate above support at 1570.37, the 38.2% Fibonacci expansion. Near-term resistance is at 1589.36, the 23.6% level, with a break above that aiming for the February 26 high at 1620.09. Alternatively, a break downward initially aims for the 61.8% Fib at 1554.62.

Commodities_Crude_Oil_Gold_May_Rise_if_US_Jobs_Data_Outperforms_body_Picture_4.png, Crude Oil, Gold May Rise if US Jobs Data Outperforms

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $28.91 // -0.15 // -0.51%

Prices continue to consolidate above support at 28.46, the 23.6% Fibonacci expansion. Near-term resistance is in the 29.42-92 area, with a break higher exposing a falling trend line now at 30.80. Alternatively, a reversal below support targets the 38.2% level at 27.86.

Commodities_Crude_Oil_Gold_May_Rise_if_US_Jobs_Data_Outperforms_body_Picture_5.png, Crude Oil, Gold May Rise if US Jobs Data Outperforms

Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.520 // +0.026 // +0.74%

Prices broke support marked by a rising trend line set from early June, exposing the 38.2% Fibonacci expansion at 3.495. A further push beneath that aims for the 50% level at 3.463. The trend line, now at 3.526, has been recast as near-term resistance. A move back above that aims for the 23.6% expansionat 3.536.

Commodities_Crude_Oil_Gold_May_Rise_if_US_Jobs_Data_Outperforms_body_Picture_6.png, Crude Oil, Gold May Rise if US Jobs Data Outperforms

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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08 March 2013 09:56 GMT