Crude oil, gold and silver may extend gains seen in Asian and European trading on the back of a rebound in risk appetite with US equity index futures suggesting Wall St will open about one percentage point higher to start the coming session.
Commodities - Energy
[B]Crude Oil May Extend Gains on Firming Risk Appetite[/B]
[B]Crude Oil (WTI) $75.20 +$1.07 +1.44%[/B]
The correlation between crude and the MSCI World Stock Index has come off its peak somewhat but remains at a formidable 0.71, with higher stocks in Asian and early European trading helping drive prices toward a test of the $75 level. A break above resistance at a falling trend line established from January’s swing high will expose $75.62. US equity index futures are suggesting Wall St will open about one percentage point higher on Wednesday, hinting bullish momentum is likely to continue. The economic calendar is fairly quiet, with February’s US Empire manufacturing survey headlining the docket.
Commodities - Metals
[B]Gold Breaks Channel Resistance, Silver Challenging $16/oz Figure[/B]
[B]Gold $1116.35 +$15.25 +1.38% [/B]
Firmer risk appetite may not prove as supportive for gold prices as has recently been the case with the short-term correlation between prices for the yellow metal and the MSCI World Stock index now down to 0.58. Still, the metal seems to be responding to the rebound in equities in early European trade, with a break of a falling channel established from January’s swing high now opening the door for a test of the $1117.30-1125.13 region. A push beyond that exposes $1145.25.
[B]Silver $15.84 +$0.29 +1.85% [/B]
Unlike gold, silver remains firmly tied to the path of risky assets with prices showing a correlation reading of 0.98 with the MSCI World Stock Index. As with oil, sharp gains on European exchanges as well as US equity index futures point to continued buying, with a break of resistance in the $15.99-16.16 region exposing $16.81.
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