GOOD READS

Commodities: Crude Oil, Gold Vulnerable as "Fiscal Cliff" Fears Return

Crude oil and gold appear vulnerable as “fiscal cliff” fears return to undermine risk appetite and reboot demand for the safe-haven US Dollar.

Talking Points

  • Crude Oil, Copper May Follow Stocks Lower on US “Fiscal Cliff” Fears
  • Gold and Silver Vulnerable to US Rebound on Returning Haven Demand

Commodities are on the upswing ahead of the opening bell on Wall Street but optimism may prove fleeting as “fiscal cliff” concerns re-enter the spotlight. All eyes are onUS President Obama as he delivers a speech in Detroit to promote his plan to avoid the “fiscal cliff”, a set of spending cuts and tax hikes estimated to tip the world’s top economy into recession in the first half next year if left to trigger as scheduled.

Obama’s plan features $1.6 trillion in tax increases and $600 billion in spending cuts. Republicans and Democrats have been at loggerheads on a compromise plan to avoid the “cliff” and more of the same is likely to weigh on risk appetite. Such an outcome is likely to produce losses for risk-linked crude oil and copper price while gold and silver see de-facto pressure amid returning haven demand for the US Dollar.

WTI Crude Oil (NY Close): $85.93 // -0.33 // -0.38%

Prices moved lower as expected after putting in a Shooting Star candlestick. A bearish continuation Flag chart pattern now appears to be in the works, with a break of support at 85.76 confirming the setup and initially exposing the 38.2% Fibonacci expansion at 84.04. Near-term, resistance is at 89.19. A push above that aims for the Flag top at 90.76.

Commodities_Crude_Oil_Gold_Vulnerable_as_Fiscal_Cliff_Fears_Return_body_Picture_4.png, Commodities: Crude Oil, Gold Vulnerable as

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1704.05 // +4.15 // +0.24%

Prices broke lower after putting in a Bearish Engulfing candlestick pattern, taking out support at a rising trend line set from late June. Sellers now aim to challenge the November 5 low at 1672.50. The trend line (now at 1711.06) has been recast as resistance, with a push back above that aiming to challenge 1752.55.

Commodities_Crude_Oil_Gold_Vulnerable_as_Fiscal_Cliff_Fears_Return_body_Picture_3.png, Commodities: Crude Oil, Gold Vulnerable as

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

Spot Silver (NY Close): $33.07 // +0.04 // +0.11%

Prices are testing above the 23.6% Fibonacci expansion (33.28), with a break higher exposing channel support-turned-resistance now at the 34.45. Support is at 32.59, the 38.2% Fib. A drop below that aims for the 50% level at 32.03.

Commodities_Crude_Oil_Gold_Vulnerable_as_Fiscal_Cliff_Fears_Return_body_Picture_2.png, Commodities: Crude Oil, Gold Vulnerable as

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

COMEX E-Mini Copper (NY Close): $3.664 // +0.020 // +0.55%

Prices are testing above resistance at 3.676, the 50% Fibonacci expansion, with a break higher exposing the 61.8% level at 3.742. Near-term trend line resistance-turned-support set from the September 14 swing high is at 3.636. A drop below that targets the 38.2% expansion at 3.612.

Commodities_Crude_Oil_Gold_Vulnerable_as_Fiscal_Cliff_Fears_Return_body_Picture_1.png, Commodities: Crude Oil, Gold Vulnerable as

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, please CLICK HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

Quiz: How well do you know India's economy?

Question 1

Which of these products is India the world's largest producer of?

Poll Choice Options
  • Wheat
  • Rice
  • Milk
1
2
3
4
5
6
7
8
9
10

Latest News

  • China Resources chairman sacked amid corruption investigation
    China Resources chairman sacked amid corruption investigation

    A Chinese executive under investigation for suspected corruption has been sacked as chairman of powerful state-owned conglomerate China Resources Holdings Co. Ltd., the official Xinhua news agency said on Saturday. Citing an official with the Organization Department of the ruling Communist Party's Central Committee, Xinhua said Song Lin was fired because he was suspected of "serious discipline and law violations" - party shorthand for corruption. Song appears to be the latest official to fall …

  • Exchanges, brokerages hit with high-speed trading class action

    Dozens of the largest U.S. stock exchanges, brokerages and high-frequency trading firms were hit with a class action lawsuit by the capital of the state of Rhode Island, accusing them of manipulating the U.S. securities markets. The lawsuit was filed on Friday in Manhattan federal district court, as the high-speed trading industry came under greater scrutiny following the publication last month of author Michael Lewis' book "Flash Boys: A Wall Street Revolt." A number of regulators have said …

  • Tour Miami Beach's Burdines Department Store in 1953

    Click here to view the full photogallery.Photos via "Library of Congress Today we take take a break from the regularly scheduled residential fare to have a look at the interiors of a department store in the 1950s. Burdines, the... …

  • Rajaratnam's brother loses bid to dismiss insider trading charges
    Rajaratnam's brother loses bid to dismiss insider trading charges

    Rengan Rajaratnam, the younger brother of imprisoned hedge fund manager Raj Rajaratnam, on Friday lost a bid to dismiss some of the insider trading charges leveled against him last year. U.S. District Judge Naomi Reice Buchwald in Manhattan ruled that the indictment adequately alleged the essential elements of the crimes charged. A lawyer for Rajaratnam did not respond to a request for comment. A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined to comment. …

  • Break the Mold With a Brutalist 'Tree House' on the Chesapeake

    Click here to view the full photogallery. Up for $1.29M on Maryland's Gibson Island is this atypical Chesapeake cottage, a 2,826-square-foot fortress designed by blocky brutalism extraordinaire, Ulrich Franzen. Known as the Glass Tree House, the 1962 three-bedroom was... …

IN-DEPTH ANALYSIS & INTERVIEWS

  • This might well be India’s biggest Ponzi scam

    It was just too good to be true. Ashok Khital, 45, displays every symptom of a man who knows he's been conned. …

  • India's star studded football league

    High and mighty including Sachin, Salman & Sun Group buy ISL teams …

  • Leaderspeak with Rajesh Janey

    Rajesh Janey, President - India & SAARC, EMC shares many firsts in his life. …

  • Seed of Doubt

    Field trials have been allowed again in India. But two decades after their global launch, genetically modified (GM) crops remain controversial. …

  • Power Hungry

    Gujarat has power round-the-clock. Most other states do not. Why this will matter in the general elections. …

  • Etcetera

    The most keenly watched contest of the current general election will be the one for the Varanasi parliamentary seat, where the Bharatiya Janata Party's prime ministerial hopeful Narendra Modi squares off ... …

  • Economy vs Democracy

    As the country gets election fever, cash comes out of mattresses and turns into liquor, gifts, and food. But it is not bad for the health of the economy, reports Sarika Malhotra from the trenches. …

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    16.52+0.88+5.63%
    UNITECH.BO
    73.85+3.05+4.31%
    HDIL.BO
    13.36+0.25+1.91%
    SUZLON.BO
    718.55-6.70-0.92%
    HDFCBANKSL.BO
    57.40+2.75+5.03%
    JAIPRA.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    12.60+2.10+20.00%
    AGRIMONY.BO
    242.50+40.40+19.99%
    ACRYSIL.BO
    83.50+13.90+19.97%
    SICAL.BO
    46.00+7.65+19.95%
    SHRGLTR.BO
    65.25+10.85+19.94%
    AHLUCONT.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    11.60-2.70-18.88%
    ANISHAIMPEX.BO
    51.10-8.85-14.76%
    WINSOMTX.BO
    11.70-1.30-10.00%
    BLCISER.BO
    425.00-40.00-8.60%
    GCMSECU.BO
    59.40-5.55-8.55%
    JBML.BO
  •  
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

    •  
      Sign-in to view quotes in your portfolios.