Commodities Analysis & Opinion

Gold, Silver and WTI Crude: Trade Ideas and Analysis for Today

Gold

  1. The CPI number was a little softer than expected so inflation is not as high as it could have been. Retail sales were also weaker adding to recent indications from economic data that economic activity is slowing, which could help inflation to continue to decline.
  2. As a result the dollar moved down because there is an increased chance of a rate cut now. Therefore Gold (XAU/USD) moved higher against the US dollar.
  3. We wrote: Holding above 2350 today retargets 2363/64, perhaps as far as 2374/78. On a break above 2380 we can target 2392/98. A high for the day would not surprise me but I think shorts are too risky as I believe the downside will be limited from this area.
  4. The low of the day was at 2351 and thanks to the weak economic data we shot higher to 2390. If you took a gamble over the release of the data it paid off as we hit my target of 2392/98 as I write now overnight.
  5. Also if you bought the break above 2380 after the data release, this has worked offering a 15-point profit so far, but further gains are expected eventually.
  6. We may pause here in overbought conditions but there is definitely no reason for prices to reverse so shorts are ruled out at this stage and further gains look more likely, especially after the data.
  7. Therefore be aware that a break above 2400 can target 2414/17 before the end of the week. If we do see a drift lower I would suggest a buying opportunity at 2380/75 and longs need stops below 2370.

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Silver

  1. Silver (XAG/USD) shot higher to retest the April high at 2975/80. A break above here today is a buy signal targeting 3000/05 and 3045/65.
  2. Just be aware that a move as far as 3200 into next week could eventually be seen.

WTI Crude JUNE Future

  1. WTI Crude has been trading sideways for 2 weeks, mostly stuck in a 250-tick range. At this stage, I must wait for a breakout and hope we can jump on a decent move that might return 200 or 300 ticks profit but for now I have no new ideas while we are trapped.
  2. Just be aware that a break above 8000 targets 8080/8100, perhaps as far as 8170/90 this week.
  3. The failure to hold above 7780 yesterday signaled further losses to the next downside target of 7700/7680. If you managed to sell in time, the target was hit with a low for the day exactly here.
    Prices then shot higher to 7900 as I write overnight, indicating that we remain in a sideways channel. Unfortunately, I cannot add anything more at this stage.

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