GOOD READS

Commodities: Gold, Crude Oil Look to Fiscal Cliff Talks for Direction

Crude oil and gold prices are at the mercy of US lawmakers as all eyes remain on Washington, DC in hopes of a deal to avoid the fast-approaching “fiscal cliff”.

Talking Points

  • Crude Oil, Copper to Rise with Stocks if “Fiscal Cliff” Deal is Achieved
  • Gold and Silver to Reflect Dollar’s Response to US Budget Negotiations

The spotlight remains on Washington, DC as financial markets return from the Christmas holiday, where US policymakers have a mere five days left to deliver a deal avoiding the so-called “fiscal cliff”. The markets’ baseline scenario appears to call for a last-minute compromise that avoids an immediate fiscal shock but falls short of setting US public finances on a sustainable long-term path. The emergence of a loose framework for negotiating a “grand bargain” in the future also seems to be baked in.

While a watered-down accord is undeniably better for market-wide risk appetite than none at all, follow-through is likely to be limited to a short-term advance reflecting the dissipation of uncertainty. Indeed, with investors’ forecasts validated, the impetus for speculation evaporates. For commodities, this portends an uptick in cycle-sensitive crude oil and copper prices. Gold and silver may likewise find near-term support amid ebbing haven demand for the US Dollar.

WTI Crude Oil (NY Close): $90.98 // +2.37 // +2.67%

Prices are testing resistance at 91.23, the intersection of the 61.8% Fibonacci expansion and the top of a rising channel set from early November. A break higher targets the 76.4% level at 92.01. Support is at 90.59, the 50% Fib, with a drop below that exposing the 38.2% expansion at 89.98.

Commodities_Gold_Crude_Oil_Look_to_Fiscal_Cliff_Talks_for_Direction_body_Picture_4.png, Commodities: Gold, Crude Oil Look to Fiscal Cliff Talks for Direction

8hr Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1659.75 // +0.85 // +0.05%

Prices mounted a shallow recovery from support at 1630.97, marked by the 100% Fibonacci expansion and reinforced by the bottom of a falling channel set from mid-September.The 76.4% expansion at 1659.90 is acting as near-term resistance, with a move above that targeting the 61.8% mark at 1677.84. Alternatively, a reversal below 1630.97 aims for the 123.6% Fib at 1601.78.

Commodities_Gold_Crude_Oil_Look_to_Fiscal_Cliff_Talks_for_Direction_body_Picture_3.png, Commodities: Gold, Crude Oil Look to Fiscal Cliff Talks for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

Spot Silver (NY Close): $30.01 // +0.06 // +0.19%

Prices are stalling after breaking through support at 30.78,the 76.4% Fibonacci expansion.Near-term support is now at 29.66, the 100%level, with a break below that exposing the 123.6% expansion at 28.55. The 30.78 level has been recast as near-term resistance. A reversal back above that targets the 61.8% level at 31.47.

Commodities_Gold_Crude_Oil_Look_to_Fiscal_Cliff_Talks_for_Direction_body_Picture_2.png, Commodities: Gold, Crude Oil Look to Fiscal Cliff Talks for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

COMEX E-Mini Copper (NY Close): $3.598 // +0.052 // +1.47%

Prices are testing above resistance at 3.596, the 23.6% Fibonacci expansion. A break higher exposes the 38.2% level at 3.643. Near-term support is at 3.522, the December 20 low, with a decline below that aiming for a rising trend line at 3.450.

Commodities_Gold_Crude_Oil_Look_to_Fiscal_Cliff_Talks_for_Direction_body_Picture_1.png, Commodities: Gold, Crude Oil Look to Fiscal Cliff Talks for Direction

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

  • Wall St little changed amid earnings flurry

    U.S. stocks were little changed in choppy trading on Thursday following three days of gains, as underwhelming results from tech giants Google and IBM were offset by upbeat quarterly numbers including those ... …

  • App Makes It Easier to Spot and Dispute Questionable Payment Transacti …

    BillGuard helps users track activity across all their credit and debit card accounts and makes approving or contesting a charge as simple as a swipe. …

  • Free Associate in Style in These Chic Psychoanalysts' Offices

    Photo via Co.Design According to Mark Gerald, the intersection between interior design and psychoanalysis goes way beyond the rug-draped chaise longue depicted in innumerable New Yorker cartoons. "In some cases, the analyst creates a space consciously and intentionally," the therapist... …

  • Midcentury 'Urban Tree House' in Cali Wants $1.225M

    Click here to view the full photogallery. While this bohemian, midcentury modern listing might lack the qualifications needed to actually count as the bona fide "urban tree house" the brokerbabble insists it is—really it's more surrounded by trees than... …

  • S&P: India ratings to depend on next govt's policies
    S&P: India ratings to depend on next govt's policies

    Standard and Poor's may upgrade India's outlook if the government that is elected next month addresses some of the country's fiscal and economic challenges through steps such as passing a goods and services tax. "If in the future they implement policies that effectively addresses some of the credit weaknesses that I have highlighted, we could revise the outlook to stable again," said S&P senior director Kim Eng Tan in a webcast. S&P rates India at "BBB-minus" and is the only of the three …

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.

    Yahoo Cricket