Talking Points

  • Crude Oil Gains on Hurricane-Linked Supply Disruption Fears, Copper Flat
  • Gold, Silver May Fall if Dallas Fed Manufacturing Gauge Dents QE3 Hopes

Gold, silver and copper are treading water in European hours as markets wait for the first bit of stage-setting economic data ahead of Friday's much-anticipated speech from Ben Bernanke at the Jackson Hole central bank symposium, which many hope will bring an announcement of QE3. Crude oil is outperforming amid supply fears as Hurricane Isaac nears the Gulf of Mexico.

The Dallas Fed Manufacturing Survey is in focus on the calendar, with expectations calling fora narrow improvement in August after the metric hit a 10-month low in July.Such a result may turn the markets' attention to the recent improvement in US economic data, denting stimulus bets. This is likely to dent inflation-hedge demand and weigh on gold and silver. It may likewise punish copper amid a breakout of broad-based risk aversion.

WTI Crude Oil (NY Close): $97.26 // +0.42 // +0.43%

Prices are consolidating between resistance at 97.82, the 61.8% Fibonacci retracement, and support at 95.41, the February 2 low. A break downward initially targets the 50% Fib at 93.90. Alternatively, a push higher through resistance exposes a falling trend line set from the late-February swing top, now at 99.22, as well as the psychologically significant $100/barrel figure.

"Gold_Waiting_for_US_Data_to_Shape_QE3_Bets_Oil_Gains_on_Supply_Fears_body_Picture_3.png,

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1654.65 // +16.85 // +1.03%

Prices put in a Doji candlestick below trend-defining resistance at a falling trend line set from the August 23 2011 swing high, hinting a pullback may be ahead. Initial support lines up at 1658.55, the 50% Fibonacci retracement, with a break below that targeting the 38.2% level at 1627.46. Alternatively, a break above the trend line (now at 1671.94) on a daily closing basis exposes the 61.8% retracement at 1689.63 and the 1700/oz figure.

"Gold_Waiting_for_US_Data_to_Shape_QE3_Bets_Oil_Gains_on_Supply_Fears_body_Picture_4.png,

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $30.78 // +0.20 // +0.66%

Prices are testing trend-defining falling trend line resistance set from the late-April 2011 swing top (31.09). A push above this barrier marks a significant reversal and initially exposes the 32.00 figure and a horizontal pivot at 32.93. Near-term support lines up at 29.70.

"Gold_Waiting_for_US_Data_to_Shape_QE3_Bets_Oil_Gains_on_Supply_Fears_body_Picture_5.png,

Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.484 // -0.008 // -0.23%

Prices are drifting higher after clearing resistance at a falling trend line set from early April and a horizontal barrier at 3.442. The bulls now target 3.535, a range top dating to late May reinforced by the top of a rising channel set from the August 2 low. A push higher beyond that initially exposes 3.618. The 3.442 level has been recast as near-term support. A reversal back below that targeting the 3.386-402 area.

"Gold_Waiting_for_US_Data_to_Shape_QE3_Bets_Oil_Gains_on_Supply_Fears_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