Crude Oil to Take its Cues from U.S. Corporate Earnings, Gold May Be Ready to Fall Again
Commodities - Energy
Crude Oil to Take its Cues from U.S. Corporate Earnings
Crude Oil (WTI) $74.61 -$0.35 -0.47%
Commentary: Crude oil is slightly lower after falling 1.5% on Monday. The latest action seems to be a bit profit taking, as the commodity has risen briskly off the $71.50 lows put in just last Tuesday. This week marks the beginning of the U.S. corporate earnings season, which will undoubtedly have a significant impact on the direction of equity markets, and in turn, crude oil markets. Earnings announcements from bellwether corporations such as JP Morgan, will give markets an idea of the health of the U.S. economy and thus bear close watching. Notable economic releases this week include U.S. retail sales data on Tuesday and industrial production numbers on Thursday.
Technical Outlook: Look for crude oil to continue moving within the recent upward trending channel, with initial resistance at the recent high above $79 and then at the channel top near $80.61. On the downside, support can be found at the bottom of the channel at $72.55, followed by last Tuesday’s low near $71.50.
Commodities - Metals
Gold May Be Ready to Fall Again
Gold $1199.65 +$2.80 +0.23%
Commentary: Gold fell 1.22% on Monday, sending the metal back toward the bottom of the recent narrow consolidation range. Gold has been fluctuating between $1185 and $1215 since plunging over $50 in a one-day move two weeks ago. The length of this consolidation suggests that the next move may be a continuation of the correction lower. We would thus be extremely cautious about taking long positions at this time.
Technical Outlook: The $1215 reaction high has become formidable near-term resistance, while the recent $1185 lows remain support. In the event of another leg lower, look for prices to approach $1166 horizontal support.
Silver $17.92 -$0.04 -0.22%
Commentary: In a predictable session, silver lost 1% on Monday, as the metal followed gold almost tick for tick. The well-defined $17.50-$19.00 is still in play, however, another leg lower in gold prices could have silver challenging the bottom of the range with a high probability for a breakdown.
Technical Outlook: $17.50 is key support that extends back to April. On the upside, $19.00 is resistance.
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