There would need to be another dramatic leg lower in broad financial markets in order to bring crude oil under $70.00. Currently, the commodity is benefitting from positive news flow with regard to demand growth around the world. Gold, on the other hand, has a clear lack of catalysts at the moment.Commodities - Energy
Crude Oil Steady After China Demand Hits Records
Crude Oil (WTI) $76.13 +$0.04 +0.05%
Commentary: Crude oil is up a few pennies after rallying 4% last week. News that China’s crude oil imports rose to a record high in June, while bullish, is having little impact thus far. Preliminary data released yesterday by China’s General Administration of Customs indicates that June imports rose to 22.14 million metric tons, higher than the previous record of 20.98 million tons in April. Additionally, the latest data on U.S. demand has been pointing toward a 5% year-over-year increase. Oil is likely to keep rising in the event we keep seeing these bullish data points on world demand growth. There needs to be substantial evidence of a double dip in world economies for crude oil to break recent lows near $70.00.
Commentary: Crude oil is up a few pennies after rallying 4% last week. News that China’s crude oil imports rose to a record high in June, while bullish, is having little impact thus far. Preliminary data released yesterday by China’s General Administration of Customs indicates that June imports rose to 22.14 million metric tons, higher than the previous record of 20.98 million tons in April. Additionally, the latest data on U.S. demand has been pointing toward a 5% year-over-year increase. Oil is likely to keep rising in the event we keep seeing these bullish data points on world demand growth. There needs to be substantial evidence of a double dip in world economies for crude oil to break recent lows near $70.00.
Technical Outlook: Look for resistance at the recent highs near $78.50, while last Tuesday’s lows near $71.50 provide support.
Gold Lacking Catalysts
Gold $1210.05 -$1.55 -0.13%
Commentary: Gold fluctuated last week, but ultimately ended the week where it began. Currently prices are not moving much. With the Euro well off its recent lows and reduced concern over sovereign debt, it is hard to get excited about gold at levels above $1200. On the other hand, investor appetite remains insatiable with gold ETF holdings hitting a new record last week.
Technical Outlook: The reaction high of the latest 6.4% downswing near $1215 is near-term resistance, while $1185 and $1166 provide support.
Silver $18.10 -$0.03 -0.17%
Commentary: Since April, silver prices have been largely rangebound between the low-mid $17’s and $19. There is no catalyst in the near-term to move the metal out of this range.
Technical Outlook: $17.50 is key support that extends back to April. On the upside, $19.00 is resistance.
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