Talking Points

  • Crude Oil, Copper Aim Lower as Growth-Geared Assets Sink After Fed Minutes
  • Gold and Silver Under Pressure as Risk Aversion Boosts Demand for US Dollar

Commodity prices are trading sharply lower as risk aversion grips financial markets amid worries about slowing economic growth after minutes from June's FOMC meeting failed to advance expectations of a QE3 program to be unveiled in the near term. The Bank of Japan likewise disappointed on the stimulus front, opted to reshuffle funds between the credit-loan and asset-purchase programs instead of expanding accommodative measures.

Sentiment-linked crude oil and copper prices are following stocks lower. Meanwhile, gold and silver are facing de-facto selling pressure as haven-seeking capital flows pour into the US Dollar. S&P 500 stock index futures are pointing sharply lower ahead of the opening bell on Wall Street, arguing for more of the same in the coming session.

WTI Crude Oil (NY Close): $85.81 // +1.90 // +2.26%

Prices are testing above resistance at 10174, the 50% Fibonacci retracement, after taking out falling trend lineresistance set from late May. A break higher initially exposes targets the 61.8% level at 10209. Near-term support is marked by the trend line and reinforced by the 38.2% Fib at 10139.


Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1576.40 // +9.13 // +0.58%

Prices broke support at 1575.81, the 38.2%Fibonacci expansion, after putting in a bearish Evening Star candlestick pattern below falling trend line resistance set from late March. Sellers now aim to challenge the 50% Fib at 1555.61, with a break below that exposing the trend-defining 1522.50-32.45 area. The 1575.81 level has been recast as near-term resistance.


Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $27.13 // +0.30 // +1.13%

Prices are testing support is at 26.75, with a break below that exposing the multi-month triple bottom at 26.05. Trend line resistance is now at 28.02, with a breach above that exposing the underside of a previously broken Flag formation (currently at 28.64).


Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.448 // +0.50 // +1.47%

Prices are testing support at 3.386, the 23.6% Fibonacci expansion, with a break lower exposing the 38.2% level at 3.280 and major double bottom at 3.250. Near-term resistance lines up at 3.450, the 14.6% level, with a breach higher targeting 3.535.


Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for

To contact Ilya, e-mail Follow Ilya on Twitter at @IlyaSpivak