CF: Oil May Stumble as Gold Finds Support on US PMI Data
Oil Prices May Stumble on Chicago PMI, Inventory Data
Oil prices look to have taken out resistance at $79.04, though the break is rather shallow and the grind higher to test the psychologically significant barrier at $80 may be a slow one. Expectations of a decline in December’s Chicago PMI may also complicate the push higher, forcing a pullback (albeit a shallow one) in the recent surge of upbeat sentiment about the US economic recovery. A relatively small decline in the Department of Energy’s weekly crude inventory gauge may also prove to be a hurdle.
Gold, Silver May Find Support in Disappointing US Data
Gold $1092.25 -$4.59 -0.42%
Gold has continued to inch lower after testing resistance at the top of a falling channel that has guided spot rates lower for most of the current month. Continued bearish momentum targets support at $1082.48. The metal retains a strong inverse correlation with the outlook for US monetary policy (as expressed by the spread between Dec’2010 and Mar’2010 fed funds futures), forcing losses on steadily improving US data. This relationship may start to offer prices a bit of support with Chicago PMI set to decline for the first in three months in December.
