Crude oil will look toward to the DOE inventory report tomorrow for a bit of guidance. The API survey, released a day earlier, is hinting at a bearish report. Gold prices continue to be dictated by investment flows, which remain at record levels.Commodities - Energy
Crude Oil Awaits Inventory Figures After Rising 3% on Tuesday
Crude Oil (WTI) $76.90 -$0.25 -0.32%
Commentary: Crude oil is close to unchanged after soaring almost 3% on Tuesday. The last several sessions have seen risk assets move higher as the global economic outlook has failed to worsen. This week the upside momentum has continued with the release of supportive corporate earnings announcements in the U.S. After the market close, Intel announced the “best quarter in the company’s 42-year history,” which should be supportive of equities, and in turn, crude oil.
Commentary: Crude oil is close to unchanged after soaring almost 3% on Tuesday. The last several sessions have seen risk assets move higher as the global economic outlook has failed to worsen. This week the upside momentum has continued with the release of supportive corporate earnings announcements in the U.S. After the market close, Intel announced the “best quarter in the company’s 42-year history,” which should be supportive of equities, and in turn, crude oil.
Tomorrow is Wednesday, and thus the Department of Energy will release the weekly U.S. inventory report. The API survey is hinting at a bearish report (Crude +1736K, Gasoline +1733K, Distillate +3192K) versus analyst expectations (Crude -1500K, Gasoline unchanged, Distillate +1000K). While crude oil has not responded to recent inventory reports in any lasting way, a bearish report could lead to a bit of a profit taking considering the strong gains accumulated since the $71.50 low put in just last Tuesday.
Technical Outlook: The upward trending channel remains the dominant technical feature on the charts. The 6/28 highs at $79.38 provide initial resistance, followed by the channel top near $80.76. On the downside, yesterday’s lows at $71.44 is support, followed by last Tuesday’s $71.50 low.
Commodities - MetalsGold Tests the Top of the Recent Range
Gold $1211.25 -$1.10 +0.09%
Commentary: In a yo-yo fashion, gold prices made a move toward the top of the recent range near $1215, after hitting the bottom of the range on Monday. Clearly, the move was not related to any safe haven demand of any sort. Instead, gold continues to fluctuate based on the whims of investors. Gold ETF holdings hit a new record high of 66.75 million troy ounces on Tuesday. As long as this rapid pace of investment demand continues, gold prices will be well supported.
Technical Outlook: Prices are once again testing the $1215 level, which is the reaction high of the 6/28-7/01 downswing. The recent $1185 lows remain support.
Silver $18.24 -$0.01 -0.05%
Commentary: Silver rose on Tuesday, in step with gold. At $18.25, prices are exactly in the middle of the range that has existed since April. Silver continues to be a more volatile version of gold, but the additional volatility has not resulted in better performance, or even more leveraged performance. The gold/silver ratio has been stuck between 60 and 70. From the perspective of any holding period beyond a few days, there has been no benefit to trading or investing in silver over gold.
Technical Outlook: $17.50, the bottom of the range, is key support that extends back to April. On the upside, $19.00 is resistance and the top of said range.
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