 |  |
Click charts to enlarge | |
The above charts are daily charts of December Gold and October Crude Oil. Both are trading considerably higher on the day as we are preparing this blog at 10:30 AM Chicago time (CDT); Tuesday Sept. 8. There has been a breakout in the gold as illustrated here which occurred during last week’s trading. Using what we believe to be a standard measuring technique using the base of the triangle added to the point of breakout the potential price objective comes to approximately $1105.
The Crude Oil chart shows that it is attempting to break over a near term down trend line but with a significant Fibonacci resistance at approximately 7195.
Many are asking what has gotten in to these markets today. We have seen a few factors that are providing influence. First is that the US Dollar is trading sharply lower. This typically has been supportive to commodities such as precious metals and crude oil.
We have heard that The UN is now talking about a new global currency. Also the G20 communique stated that monetary and fiscal stimulus would continue and this may help maintain at least the perception of a less risky environment therefore reducing the safe haven status of the US Dollar.
Goldman Sachs forecasts $85.00 per barrel crude oil and also, we understand that that a popular oil ETF is due to liquidate its crude assets which may be reallocating investment capital into gold. There has also been some chatter of Chinese interest in accumulating gold as an inflationary hedge.
We believe this will make for interesting price action particularly over the next few days. We are not suggesting here to either buy or sell either commodity but certainly noting that there could well be opportunities for trading ideas being presented.
As always this is something we discuss more in depth with our clients but we encourage any questions, comments or better still, any answers directed to us at:
312 261-7380
800 321-5810
Jeff Majer
Diego Pilar
CB&S Division
MF Global Inc.
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
No comments:
Post a Comment