Crude Oil Gains on Geopolitical Jitters, Gold Waits for Sentiment Cues

Talking Points

• Crude Oil Gains as Hormuz Strait Collision Stirs Geopolitical Jitters
• Copper Facing Sustained Selling Pressure after Japan GDP Outcome
• Gold and Silver Noncommittal as Risk Trends Hold at Neutral Setting

Commodity prices are putting in a mixed performance ahead of the opening bell on Wall Street. Crude oil found a boost in reports that a US destroyer collided with an oil tanker near the Strait of Hormuz, copper remains on the defensive having met selling pressure after a disappointing set of Japanese GDP figures, while gold and silver are little changed. The US economic calendar offers no scheduled event risk and S&P 500 stock index futures have erased earlier losses, putting risk trends at a neutral setting and clouding the near-term outlook in uncertainty. On balance, another choppy non-committal day may be ahead until the data docket heats up in earnest tomorrow.

WTI Crude Oil (NY Close): $92.87 // -0.49 // -0.52%

Prices continue to test resistance in the 93.21-90 area marked by the July 19 high and the 50% Fibonacci retracement. Near-term support remains at the psychologically significant 90.00 figure, a barrier is reinforced by the 38.2% retracement at 89.87. A break below the latter level exposes a rising trend line set from early July, now at 88.38. Alternatively, a push above resistance initially targets the 61.8% Fib at 97.82.

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1620.20 // +2.95 // +0.18%

Prices continue to hover near resistance in the 1620.45-35.70 congestion area. A turn lower from here aims to test support at a rising trend line support set from late June, now at 1593.35. A break below this boundary exposes a longer-term trend line established from the May 16 bottom currently at 1573.96. A push above resistance initially targets 1677.79, the May 1 swing high.

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $28.12 // -0.02 // -0.05%

Prices continue to tread water after taking out resistance at 27.68. Near-term resistance lines up at 28.44, with a break above that exposing 29.42. Alternatively, a reversal back through support targets a rising trend line at 27.19 and the May 16 low at 26.75.

Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.392 // -0.034 // -0.99%

Prices are testing through support at 3.387 after recoiling from resistance at a falling trend line set from the April 3 high. A break downward opens the door for a move to 3.300. Trend line resistance is now at 3.442 and is reinforced by a horizontal barrier at 3.435.

Daily Chart - Created Using FXCM Marketscope 2.0

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

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak