Crude Oil, Metals Retreat Ahead of US Jobs Report

Commodities – Energy

Oil Perched Above Trend-Defining Support Ahead of Nonfarm Payrolls

Crude Oil (WTI)       $75.84       -$0.62       -0.81%
Crude are once again approaching the bottom of the falling channel that has guided prices since the swing top in October. The bears now face a major hurdle just below the $75 mark as the channel bottom coincides with a major rising trend line established from the lows in February and an important horizontal resistance-turned-support level. A break below here would be a trajectory-defining outcome, confirming the high above $80 as a major top and opening the door for a sizable move lower. Turning to the fundamentals, all eyes are on November’s US Nonfarm Payrolls data. Expectations suggest the world’s largest economy shed 125,000 jobs in November, the least since March 2008. However, we learned yesterday that the non-manufacturing sector unexpectedly shrank in November; services account for close to 80% of US employment, so a downside surprise is not out the question, and could weigh on crude prices into the close of the trading week.




Commodities – Metals

Gold Validates Bearish Technical Outlook, US Jobs Report on Tap

Gold       $1205.00       -$2.60       -0.22%
Yesterday’s bearish gold technical forecast played out as expected as prices took out support at the bottom of a Rising Wedge formation. A minor falling channel has guided the move lower, with gold now consolidating above the $1195.10 – $1200.50 congestion region. As with oil, Nonfarm Payrolls release dominates attention fundamentally.

Silver       $18.82       -$0.01       -0.05%
As with gold, yesterday’s bearish technical setup was validated with prices breaking lower to take out resistance-turned-support at $18.86, a prior triple top that had contained prices through November, and have now pulled up slightly to re-test this boundary on the upside. The down move has been confined to a minor falling channel, with continued bearish momentum seeing near-term support at $18.42. Nonfarm Payrolls are in focus fundamentally.

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