Talking Points

  • Crude Oil, Copper Rise with Stocks as After Neutral Chinese GDP Report
  • Gold and Silver Find Support as Risk Recovery Forces US Dollar Pullback

Commodity prices are on the upswing amid a broad-based recovery in risk appetite after second-quarter Chinese GDP figures printed broadly in line with expectations overnight. The result was received as net-neutral for sentiment, offering no additional fodder to drive risk aversion. This opened the door for a recovery in growth-geared assets, sending crude oil and copper higher. Gold and silver likewise found support as risk-on conditions sapped haven demand for the US Dollar.

S&P 500 stock index futures are pointing higher ahead of the opening bell on Wall Street, arguing for more of the same into the week-end.The preliminary estimate of July's University of Michigan gauge of US Consumer Confidenceheadlines the economic calendar. Expectations call for a shallow uptick from the six-month low recorded in June, an outcome that seems unlikely to generate fireworks from price action. Second-quarter earnings reports from JPMorgan and Wells Fargo may prove market-moving however as traders look for evidence on the impact of Eurozone-linked jitters on market-wide financial conditions.

WTI Crude Oil (NY Close): $86.08 // +0.27 // +0.31%

Prices are consolidating above support at 84.14, the 23.6% Fibonacci retracement. Near-term resistance is at 88.40, the 38.2% level, with a break above that exposing the 90.00 figure. Alternatively, a breach of support targets the 81.19-52 area marked by the June 4 low and the 14.6% retracement.

Crude_Oil_Gold_Rise_as_Risk_Appetite_Corrects_Higher_into_Week-End_body_Picture_3.png,

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1571.95 // -4.45 // -0.28%

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 stand 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.

Crude_Oil_Gold_Rise_as_Risk_Appetite_Corrects_Higher_into_Week-End_body_Picture_4.png,

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $27.17 // +0.04 // +0.14%

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 27.95, with a breach above that exposing the underside of a previously broken Flag formation (currently at 28.78).

Crude_Oil_Gold_Rise_as_Risk_Appetite_Corrects_Higher_into_Week-End_body_Picture_5.png,

Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.416 // -0.32 // -0.93%

Prices are testing above resistance at 3.445, the 14.6% Fibonacci expansion, with a break higher exposing upside barriers at 3.535 and 3.618. Near-term support remains at the 23.6% Fib (3.378) for now.

Crude_Oil_Gold_Rise_as_Risk_Appetite_Corrects_Higher_into_Week-End_body_Picture_6.png,

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