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Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

David de Ferranti, Currency Analyst

Talking Points

  • Gold and Silver Continue Their Recovery As US Dollar Loses Momentum
  • Crude Oil Left Lacking Bullish Cues Following US Data Deterioration
  • Copper Looks Past China Trade Figures, Top-Tier Events Still On The Horizon

Crude oil has regained its footing in Asian trading today after WTI slumped by more than 1 percent on Friday. A disappointing US jobs report likely raised some concerns about the US economic recovery and weighed on the commodity. Similarly the miss from NFPs has left the greenback lacking momentum. Which in turn has helped the precious metals maintain their ascent today (silver is leading the pack; +0.49 percent).

Looking ahead; a light US economic docket may do little to re-inspire the US Dollar bulls, which could keep gold and silver elevated. Yet the fundamental drive for a more pronounced recovery may be missing. This is in light of ebbing geopolitical tensions, that threaten to sap safe-haven buying of the alternative assets.

Finally, copper has looked past a mixed set of trade balance figures from China, the world’s largest consumer of the commodity. Chinese imports of unwrought copper slipped for the fourth consecutive month to the lowest since April 2013. However, this concerning slump was offset by a rebound in ore and concentrate demand.

Chinese New Loans and CPI data still loom on the horizon this week. Yet copper’s muted reaction to today’s figures raises a question mark over whether the upcoming “top-tier” data will witness much of a response.

Bigger picture it may be optimistic to expect strong stimulus from Chinese monetary authorities in the near-term. This is given their desire to try and reign in credit growth and cool a ‘bubbly’ housing market. In turn this could cap copper’s upside potential.

TODAY’S ECONOMIC DATA

Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

Source:DailyFX Economic Calendar, Times In GMT

CRUDE OIL TECHNICAL ANALYSIS

WTI remains capped below its descending trendline on the daily with the 20 SMA also offering some resistance. This leaves the immediate risks skewed to the downside and sets the scene for a retest of the recent lows near 92.55. A downside break of the nearby barrier would open a knock on the 91.20 floor.

Crude Oil: Selling Into Rallies Preferred As Downtrend Persists

Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS

Gold is at a crossroads as the yellow metal teases at a push through selling pressure at the 1,272 barrier. A leap over the hurdle and descending trendline would confirm a Piercing Line candlestick pattern. This in turn would cast the spotlight on the recent highs near 1,322. However, while below the noteworthy resistance levels the immediate risks remain skewed to the downside with a focus 1,257.

The DailyFX SpeculativeSentimentIndex suggests a mixed bias for gold based on trader positioning.

Gold: At A Crossroads Near Noteworthy Resistance

Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

Daily Chart - Created Using FXCM Marketscope 2.0

SILVER TECHNICAL ANALYSIS

Silver’s bounce off the $19.00 floor is seen as corrective at this stage. Given the context of a sustained downtrend; a retest of the 19.50 mark would be seen as a fresh opportunity for new short positions. A climb above the upside barrier would be required to confirm the Bullish Engulfing candlestick pattern and to warn of a small base.

Silver: Selling Into Rallies Preferred Within Context Of A Core Downtrend

Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

Daily Chart - Created Using FXCM Marketscope 2.0

COPPER TECHNICAL ANALYSIS

Sellers appear intent on capping copper below its descending trendline on the daily. Yet price action continues to be messy and signs of an emerging uptrend are appearing (ROC, prices above 20 SMA). Awaiting a more constructive setup may be the most prudent course for playing the commodity.

Copper: Threatens Shift In Sentiment, Yet Capped Below Descending Trendline

Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

Daily Chart - Created Using FXCM Marketscope 2.0

PALLADIUM TECHNICAL ANALYSIS

Palladium may be set to retest the 900 barrier following the emergence of a Bullish Engulfing formation on the daily. Within the context of a core uptrend; while above 866 the risks are skewed to the upside. A break below the ascending trend channel would be required to warn of a top and indicate the potential for further weakness.

Palladium: Buying Dips Preferred While Core Uptrend Intact

Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

Daily Chart - Created Using FXCM Marketscope 2.0

PLATINUM TECHNICAL ANALYSIS

Downside risks remain for platinum given the context of a sustained downtrend on the daily. The push past the 1,412 barrier suggests the potential for a descent on the April lows near 1,395. A climb above the descending trendline would be required to warn of a base and the possibility of a sustained recovery.

Platinum: Sellers Reemerge After Failure To Crack The 1,424 Ceiling

Gold And Silver Rebound As US Dollar Stalls In NFP Aftermath

Daily Chart - Created Using FXCM Marketscope 2.0

Written by David de Ferranti, Currency Analyst, DailyFX

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Contact and follow David on Twitter: @DaviddeFe

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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