Talking Points
- WTI Extends Losses With OPEC Inaction Warning Of Further Weakness
- Silver Slips By Close To 2 Percent After Failing To Breach A Key Barrier
- Quarterly Forecast: Gold Remains Vulnerable To USD Strength
WTI has slipped to a fresh 2014 low in Asian trading today after witnessing a decline of close to half a percent on Wednesday. US Inventories Data released during the session revealed a climb in US crude production to its highest level since 1985, as well as a significantly higher-than-expected jump in total stockpiles.
Focus will be on the upcoming OPEC meeting over the coming session. Speculation has been rife over possible production cuts in response to falling prices. Yet at this stage members have given little indication over a potential pullback in supply in order to try to bolster the energy commodity. A lack of action may leave glut concerns to dominate sentiment and could keep pressure on the crude benchmarks.
Meanwhile, the precious metals have succumb to some surprising weakness in early trade today. Silver at present is posting a significant loss of close to 2 percent with a void of clear catalysts in sight. This also comes in spite of a relatively lackluster session for their US Dollar counterpart. A potential explanation may rest with repositioning from traders near a key technical level and a desire to flatten positions ahead of the US Thanksgiving holiday.
The US holiday also means an absence of major US data over the session ahead. Yet it also brings thin liquidity and a greater capacity for a dominant group to move the market; which may spell heightened volatility for gold and silver.
ECONOMIC EVENTS
No major US data is due over the session.
Market Movements (Wed 26 Nov, 2014, Close 5PM EST)
Energy | Open | High | Low | Close | $ Chg. | % Chg |
US Oil | 73.85 | 74.41 | 73.29 | 73.50 | (0.35) | -0.47% |
UK Oil | 78.16 | 78.83 | 77.28 | 77.55 | (0.61) | -0.78% |
4.433 | 4.524 | 4.327 | 4.33 | (0.10) | -2.30% | |
Metals | Open | High | Low | Close | $ Chg. | % Chg |
Gold | 1,200.60 | 1,201.68 | 1,194.83 | 1,197.58 | (3.02) | -0.25% |
Silver | 16.66 | 16.67 | 16.48 | 16.50 | (0.16) | -0.98% |
Palladium | 792.2 | 803.5 | 790 | 802 | 9.80 | 1.24% |
1,222.70 | 1,229.00 | 1,217.50 | 1,226.00 | 3.30 | 0.27% | |
2.96 | 2.98 | 2.94 | 2.95 | (0.01) | -0.34% |
CRUDE OIL TECHNICAL ANALYSIS
Crude is testing a critical support region with indications of a downtrend persisting (descending trendline, 20 SMA). This leaves downside risks to remain and suggests a break could open 70.80 (the August ’10 Low). A daily close above 77.00 would be required to warn of a base for the commodity.
Crude Oil: Testing Critical Support Region
GOLD TECHNICAL ANALYSIS
Gold remains at a crossroads as trend indicators warn of building upside momentum (20 SMA and ROC). Yet it is still capped below key resistance at 1,208 (also the 61.8% Fib.). This leaves a clearer setup desired to offer a more concrete technical bias.
The DailyFX Speculative Sentiment Index suggests a mixed bias for gold based on trader positioning.
Gold: At A Crossroads Below Key Resistance With Trend Indicators Pointing Higher
SILVER TECHNICAL ANALYSIS
Silver’s ascent appears to have been capped at the 16.70 mark (former support-turned-resistance). It was the last obstacle to a more sustained advance after clearing the 50% Fib., 20 SMA, and descending trendline. The failure to breach the barrier suggests the bears may be unprepared to relinquish their grip on the metal. This in turn opens the prospect of a short-term pullback.
Silver: Fails At Final Hurdle
COPPER TECHNICAL ANALYSIS
Copper has continued its impulsive swings, which has left a Hammer formation in its path. Yet the key reversal pattern awaits confirmation from a successive up-period before indicating the prospect of a recovery. Moreover, caution is suggested when adopting fresh positioning given the commodity’s tendency towards volatility over recent months.
Copper Choppiness Suggests Caution Required
Palladium TECHNICAL ANALYSIS
Palladium is struggling to sustain its recent gains at the 38.2% Fib. This has left a pair of Dojis in its path. However, the candlestick formations are not considered key reversal patterns. Alongside signs of an emerging uptrend a pullback remains questionable.
Palladium: Struggles Sub The 38.2% Fib.
Platinum continues to struggle to lift-off from the 1,187 floor despite a Bullish Engulfing pattern lying in its wake. This the bears are still unprepared to relinquish their grip on the metal and may continue to pull it towards its recent lows.
Platinum: Bears Pull Prices Towards Recent Lows
