Crude oil, gold and silver may see some corrective price action after this week's sharp declines as traders take the relatively tame economic and earnings calendar to book some profits into the end of the trading week. Commodities – Energy OIL EXTENDS LOSSES AS WEAK DEMAND SEES REFINERIES CUT BACK OUTPUT Crude Oil (WTI) $76.36 +$0.28 +0.37% Oil prices broke lower to take out support at $77.67 despite an unexpected decline in crude inventories as the Department of Energy reported yesterday that weak demand saw US refineries scale back output by a whopping 2.92% last week, the largest decline in three months. Downside barriers are now seen at $75.60 and $74.48, with a break below that exposing the $70.00 figure. A period of consolidation may be ahead into the week-end, underpinned by overnight reassuring comments from Chinese central bank chief Zhou Xiaochuan who reaffirmed that his country will maintain a moderately loose monetary policy. Fears about fading demand from the world’s number-two crude consumer spread yesterday as investors speculated that policymakers may boost efforts to restrict credit flow to prevent the buoyant economy from overheating after growth and inflation figures topped expectations. A scheduled fourth-quarter earnings report from Schlumberger Ltd, an oil services firm, is a wild card and may spark fresh selling on a disappointing outcome. GOLD, SILVER DECLINE MAY STALL ON PROFIT-TAKING INTO WEEK-END Gold $1095.14 +$1.19 +0.11% Prices slipped below the $1100 figure to find near-term support at $1090.00 amid a broad selloff in risk-correlated assets, with continued selling set to expose December’s swing low at $1074.50. The near-term correlation between gold and the MSCI World Stock index has advanced to 96.3%, meaning the trajectory of risk appetite remains the primary fundamental driver. Although equities suffered a sharp decline in Asia and appear mixed in early European trade, the US Dollar has edged lower while US stock index futures have advanced. This suggests that markets may see some corrective price action ahead as traders take the relatively tame economic and earnings calendar to book some profits into the end of the trading week. Silver $17.43 +$0.03 +0.17% Silver prices extended losses to break below support at $17.56, the 61.8% retracement of the 12/30 – 01/11 upswing. Near-term support now lines up at $17.24, with a move below this juncture exposing the late-December swing low at $16.73. Silver’s correlation with the MSCI World Stock Index remains at a formidable 92%, suggesting some corrective price action may be ahead with US stock index futures in positive territory ahead of the opening bell on Wall St.

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