Crude oil, gold, and silver are likely to continue correcting higher, following risky assets as the EU prepares to announce a bailout of the debt-ridden Greek economy while US jobless claims decline. Prices have continued to advance along with overall risk sentiment after an article in yesterday’s Wall Street Journal suggested Germany was preparing to lead an EU effort to offer Greece loan guarantees to help quell jittery financial markets fearing a sovereign default within the Euro Zone. Policymakers are set to begin a summit on the matter at 9:15 GMT in Brussels, with an outcome to be announced at a press conference at 15:45 GMT. On balance, some sort of bailout is probable. From its inception, the European Union was always an arrangement grounded in geopolitical expediency rather than sound economics. This means that, tough talk about fiscal discipline notwithstanding, the EU does not see it as politically acceptable to allow an economic failure that would compromise the structural integrity of the regional bloc. Risky assets (including crude) are likely to see a boost after if a rescue package is confirmed, with significant resistance now seen just below the $76 figure. However, sentiment began to sour long before the Greek issue jumped into the forefront, suggesting that any resolution to the southern European country’s debt woes will be a temporary reprieve before risk aversion returns in earnest. In the interim, expectations of a lower print on weekly US jobless claims figures may also prove supportive.

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