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Crude Continues To Crumble, Silver Leads Precious Metals Lower

Crude Continues To Crumble, Silver Leads Precious Metals Lower

2014-12-16 04:20:00
David de Ferranti, Currency Analyst
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Talking Points

The precious metals witnessed a dramatic slide at the outset of the week with silver leading the pack lower (-5.15 percent). Newswires pointed to USD gains alongside a generally soft session across the broader commodities space as potential explanations behind the declines.

Looking ahead; the greenback may look past upcoming US Markit PMI data as traders await the more important December Fed decision later in the week. Hesitation from traders ahead of the meeting casts some doubt over the prospect of further gains for the reserve currency, which in turn may afford gold some breathing room.

Meanwhile, crude oil continued its slump in recent trade with WTI off by close to 4 percent on Monday. Supply glut anticipation coupled with downgraded demand expectations may continue to keep pressure on the commodity over the near-term.

ECONOMIC EVENTS

Please refer to the DailyFX Economic Calendar for the events over the session ahead.

Market Movements (Mon 15 Dec, 2014, Close 5PM EST)

Energy

Open

High

Low

Close

$ Chg.

% Chg

US Oil

57.5

58.71

55.01

55.26

(2.24)

-3.90%

UK Oil

61.46

63.2

60.19

60.48

(0.98)

-1.59%

Natural Gas

3.774

3.918

3.696

3.73

(0.04)

-1.11%

Metals

Open

High

Low

Close

$ Chg.

% Chg

Gold

1,222.20

1,224.02

1,190.57

1,192.86

(29.34)

-2.40%

Silver

17.00

17.03

16.11

16.13

(0.88)

-5.15%

Palladium

813.5

815.3

795.1

795.9

(17.60)

-2.16%

Platinum

1,227.70

1,229.60

1,205.60

1,207.40

(20.30)

-1.65%

Copper

2.93

2.95

2.86

2.87

(0.06)

-2.02%

CRUDE OIL TECHNICAL ANALYSIS

Crude remains locked in a downtrend as signaled by the 20 SMA and ROC indicators. An absence of key candlestick reversal signals suggests a recovery may be unlikely at this stage. Yet given the extent of recent declines a small corrective bounce should not be precluded. Sellers may look to keep the commodity capped below the 60.74 mark. Meanwhile, the next downside target is offered by the April ’09 Low at 46.70.

Crude Oil: Eyes April ’09 Low Amid Persistent Downtrend

Crude Continues To Crumble, Silver Leads Precious Metals Lower

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS

Gold dropped further after failing to breach the 1,236 barrier and in the wake of a Harami formation. Some small buying interest appears evident at the 1,187 floor. Yet signs of a short-term downtrend appear to be re-emerging. This suggests a break lower would potentially open a retest of the recent lows near 1,137.

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

Gold: Signs Of A ST Downtrend Re-Emerge

Crude Continues To Crumble, Silver Leads Precious Metals Lower

Daily Chart - Created Using FXCM Marketscope 2.0

SILVER TECHNICAL ANALYSIS

A string of Doji formations on the daily chart signaled hesitation from the silver bulls to lead the precious metal above the 17.30 ceiling. The recent pullback has put trend indicators back into negative territory (including the ROC and 20 SMA). A breach of the psychologically-significant 16.00 handle would potentially pave the way for a push towards the 15.00 floor.

Silver: Doji Suggested Reluctance Near The 17.30 Ceiling

Crude Continues To Crumble, Silver Leads Precious Metals Lower

Daily Chart - Created Using FXCM Marketscope 2.0

COPPER TECHNICAL ANALYSIS

Copper’s downward tilt is still present despite the recent retracement. The signs of a downtrend from the 20 SMA and ROC suggestthe risks are likely skewed to the downside. This in turn keeps the June ’10 low in sight with sellers sitting nearby at the 2.96 ceiling. However, caution is still suggested when adopting fresh positioning - given the commodity’s tendency towards whipsaws over recent months.

Copper: Sights Set On June 2010 Low

Crude Continues To Crumble, Silver Leads Precious Metals Lower

Daily Chart - Created Using FXCM Marketscope 2.0

PALLADIUM TECHNICAL ANALYSIS

The 50% Fib. has kept palladium capped as signs of a shift towards a downtrend re-emerge. A slide under buying interest at the 792 floor may potentially be the precursor to a greater descent towards the recent lows near 727.

Palladium: Failure To Breach Fib. Barrier Sees Risks Shift Lower

Crude Continues To Crumble, Silver Leads Precious Metals Lower

Daily Chart - Created Using FXCM Marketscope 2.0

PLATINUM TECHNICAL ANALYSIS

Platinum has produced a Bullish Engulfing formation after bouncing from the 1,187 floor. Yet confirmation from a successive up-period and close above the 1,242 ceiling would be required before the potential for a continued ascent would be made possible.

Platinum: Bullish Engulfing Pattern Emerges Near Key Floor

Crude Continues To Crumble, Silver Leads Precious Metals Lower

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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