Both crude oils are lower for a second day, with the weakness occurring despite some supportive dollar weakness over the past 24 hours. The price of Brent crude oil has now seen lower highs on the last three upside attempts, which could indicate that hedge funds, holding a fairly extended net-long position, are becoming impatient with its failure to break out of its current 100 to 105 USD per barrel range.
WTI crude oil is testing support at the 200-day moving average at 92.42 (futures first month cont.), which is also near the lowest level in almost four weeks. The weekly inventory data later today is expected to show a decline of 500,000 barrels but with OPEC, which begins its semi-annual meeting tomorrow, expected to hold production targets unchanged, the feeling is that the global oil market is well supplied. An expected seasonal pick-up in demand later this year and continued geopolitical worries are so far not drivers that traders give too much attention.
Momentum on both remains negative, but for now the feeling is that support on Brent crude oil below 99 USD per barrel remains fairly solid with OPEC holding the key to continued price stability, a right it may exercise in the shape of a production cut should persistent price weakness become an issue.
Gold and silver have both found some support today from weaker equity markets, led by Japan overnight, and the above mentioned weakness of the dollar. Both of these supporting factors have, however, started to diminish as the day moves on. European stock markets are currently back in the black, while some renewed JPY selling after the IMF said it supported Japan's stimulus efforts has benefited the USD. Gold needs to make a clear break above 1,415 USD/oz to force those hedge funds holding short positions to reconsider. So far, we have only witnessed some weak shorts bailing out on the initial move above 1,400 USD/oz overnight. Support is currently found just below 1,400 USD/oz with a break possibly triggering some long liquidation down towards today's pivot of 1,389.6 USD/oz.
Looking towards the agriculture sector, we have seen new crop corn turn back to positive momentum following seven days of gains, which has been triggered by continued delays to US farmers' efforts to complete planting due to wet weather. The longer this delay carries on, the risk of a reduced crop will rise and this has supported the price. In early June last year, the December 2012 futures contract began its spike higher as hot and dry weather triggered worries about the crop, a worry that was more than confirmed during the summer.
WTI crude oil is testing support at the 200-day moving average at 92.42 (futures first month cont.), which is also near the lowest level in almost four weeks. The weekly inventory data later today is expected to show a decline of 500,000 barrels but with OPEC, which begins its semi-annual meeting tomorrow, expected to hold production targets unchanged, the feeling is that the global oil market is well supplied. An expected seasonal pick-up in demand later this year and continued geopolitical worries are so far not drivers that traders give too much attention.
Momentum on both remains negative, but for now the feeling is that support on Brent crude oil below 99 USD per barrel remains fairly solid with OPEC holding the key to continued price stability, a right it may exercise in the shape of a production cut should persistent price weakness become an issue.
Gold and silver have both found some support today from weaker equity markets, led by Japan overnight, and the above mentioned weakness of the dollar. Both of these supporting factors have, however, started to diminish as the day moves on. European stock markets are currently back in the black, while some renewed JPY selling after the IMF said it supported Japan's stimulus efforts has benefited the USD. Gold needs to make a clear break above 1,415 USD/oz to force those hedge funds holding short positions to reconsider. So far, we have only witnessed some weak shorts bailing out on the initial move above 1,400 USD/oz overnight. Support is currently found just below 1,400 USD/oz with a break possibly triggering some long liquidation down towards today's pivot of 1,389.6 USD/oz.
Looking towards the agriculture sector, we have seen new crop corn turn back to positive momentum following seven days of gains, which has been triggered by continued delays to US farmers' efforts to complete planting due to wet weather. The longer this delay carries on, the risk of a reduced crop will rise and this has supported the price. In early June last year, the December 2012 futures contract began its spike higher as hot and dry weather triggered worries about the crop, a worry that was more than confirmed during the summer.