Talking Points

  • Crude Oil Likely to Follow Stocks Higher if US Jobs Data Disappoints
  • Gold Chart Setup Hints at Downward Continuation Below $1300 Mark
  • Copper Continues to Consolidate, Silver Testing Trend Line Support

Commodity prices are trading wateramidmarket-wide reticence to commit to a directional bias ahead of October’s much-anticipated US Employment report. The already closely monitored Nonfarm Payrolls print gets even more attention this time around considering the numbers will include the impact of October’s government shutdown and help investors gauge to what extent it may have derailed the Fed’s preferred policy roadmap.

Expectations call for payrolls to produce a 120,000 increase, marking the smallest gain in three months. The unemployment rate is expected to rise for the first time since May, edging to 7.3 percent. A soft outcome that argues in favor of longevity for the full-sized QE3 program is likely to broadly boost cycle-linked crude oil and copper prices as well as drive anti-fiat demand for gold and silver. Needless to say, an upside surprise stands to yield the opposite effect.

Capitalize on Shifts in Market Mood with the DailyFX Speculative Sentiment Index.

CRUDE OIL TECHNICAL ANALYSIS Prices put in a Bullish Engulfing candlestick pattern at the bottom of a falling channel set from early September, hinting a bounce is ahead. Near-term trend line resistance is at 94.75, with a break above that targeting the channel top at 98.03. Initial support is at 93.09, the November 5 low.

Commodities_Crude_Oil_Gold_Look_to_US_Jobs_Data_for_Direction_body_Picture_3.png, Commodities: Crude Oil, Gold Look to US Jobs Data for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices broke below support at 1318.73, the 23.6% Fibonacci expansion, exposing the 38.2% level at 1292.15. A further push beneath that eyes the 50% Fib at 1270.67. Alternatively, a break back above 1318.73 targets the 14.6% expansion at 1335.12.

Commodities_Crude_Oil_Gold_Look_to_US_Jobs_Data_for_Direction_body_Picture_4.png, Commodities: Crude Oil, Gold Look to US Jobs Data for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

SILVER TECHNICAL ANALYSIS Prices are testing support at a rising trend line set from late June (21.61), with a break lower exposing the 38.2% Fibonacci expansion at 21.30. Alternatively, a move above resistance at the 23.6% level at 21.98 exposes the 14.6% Fib at 22.39.

Commodities_Crude_Oil_Gold_Look_to_US_Jobs_Data_for_Direction_body_Picture_5.png, Commodities: Crude Oil, Gold Look to US Jobs Data for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

COPPER TECHNICAL ANALYSIS Prices are consolidating in a Triangle chart pattern, a setup hinting at bullish continuation in this instance. A break above the formation’s top (3.321) initially targets 3.378. Alternatively, a reversal through Triangle support (3.234) aims for swing lows in the 3.190-233 area.

Commodities_Crude_Oil_Gold_Look_to_US_Jobs_Data_for_Direction_body_Picture_6.png, Commodities: Crude Oil, Gold Look to US Jobs Data for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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