Commodities - Energy
Crude Falls on Profit Taking
Crude Oil (WTI) - $91.05 // $0.51 // 0.56%
Commentary: Crude oil was fell on Thursday, with WTI shedding $0.32, or 0.35%, to settle at $90.54, while Brent fell $0.58, or 0.57%, to settle at $101.76. It was a day of profit taking as some traders lock in the gains from this week. Recall that Brent surpassed $100 for the first time in 27-months this week. In fact, prices have been above $100 every day this week. As we've been writing, the trend remains decisively higher, but a correction is overdue. Tomorrow's U.S. nonfarm payrolls report provides a bit of event risk, but forecasts aren't calling for any fireworks, with a 146K increase expected.
Technical Outlook: Prices have put in a bearish Dark Cloud Cover candlestick formation below resistance at $92.58, December's swing high, and pulled back to support at the 38.2% Fibonacci retracement of the rally from January's low ($89.89). A break lower exposes the 50% level at $88.97. Near-term resistance remains at $92.58.
Commodities - Metals
Gold Rebounds on Bargain Buying
Gold - $1351.03 // $3.32 // 0.25%
Commentary: Gold rose by $19.03, or 1.42%, to settle at $1354.35. Gold ETF holdings increased for the first time in two weeks, but just barely, and remain near 8-month lows.
Gold - FOREX correlations firmed slightly in the latest week, as gold rebounded from recent lows. The correlation between gold and AUD/USD in particular, strengthened from 0.09 to 0.53- still fairly weak- but much better than last week. The USD/CHF correlation with gold weakened slightly. For now, gold remains disconnected from the forex markets as price action is dominated by other considerations.
Technical Outlook: Prices have cleared resistance at the top ofa falling channel set from early January as well as the 38.2% Fibonacci retracement level at $1352.49. From here, the bulls are poised to challenge the 50% Fib at $1366.15. The 38.2% level has been recast as near-term support.
Silver - $28.82 // $0.12 // 0.40%
Commentary: Silver surged higher by $0.58, or 2.05%, to settle at $28.94.
The gold/silver moved lower to 46.9, but remains above the four-year low near 46 set late last year. (The gold/silver ratio measures the relative value/performance of the two precious metals. A higher ratio indicates gold outperformance, while a lower ratio indicates silver outperformance)
Technical Outlook: Yesterday's pullback proved corrective, with prices rebounding to take out resistance at $28.82, the 50% Fibonacci retracement of the 1/3-1/28 downswing. The door now looks open for an advance to the 61.8% level at $29.39. The 50% Fib has been recast as near-term support.
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