Commodities: Crude Oil, Gold Transfixed on US Employment Report

Ilya Spivak

Talking Points


  • Commodities Treading Water as All Eyes Turn to September’s US Jobs Data
  • Gold Breakout Stalling at Chart Resistance Above the $1300.00/oz Figure
  • Crude Oil Eyes Support Near $99.00 Mark After Clearing Key $100.00 Hurdle


Commodity prices are marking time in early Tuesday trade as investors wait for the much-anticipated release of September’s US Employment report before committing to a firm directional bias. Expectations suggest the economy added 180,000 jobs from the previous month, topping the 169,000 increase recorded in August. The unemployment rate is expected to hold unchanged at 7.3 percent.


Traders are likely to interpret the result in terms of its implications for Federal Reserve policy expectations. Although the figures are dated in that they won’t reflect the impact of October’s US government shutdown, they will help establish whether the economy appeared resilient enough to “taper” QE asset purchases relatively soon before fiscal headwinds intensified.


With that in mind, a strong reading is likely to suggest the expected timing of the first cutback in stimulus can be brought closer into the near term from the March time frame now penciled into median forecasts (according to a survey from Bloomberg). Such an outcome may weigh on risky appetite, punishing cycle-linked commodities like crude oiland copper, while punishing precious metals amid eroding anti-fiat demand. A soft result will probably yield the opposite effect.



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CRUDE OIL TECHNICAL ANALYSIS Prices continued to move lower as expected after clearing support at 100.88, a horizontal pivot dating back to April 2012, opening the door for a move to the 100.00 figure and 98.99 (September 2012 top).This is followed by the bottom of a falling channel set from the August 28 swing high, now at 97.57. Alternatively, a reversal above 100.88 targets the channel top at 102.59.


Commodities_Crude_Oil_Gold_Transfixed_on_US_Employment_Report_body_Picture_3.png, Commodities: Crude Oil, Gold Transfixed on US Employment Report
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Commodities_Crude_Oil_Gold_Transfixed_on_US_Employment_Report_body_Picture_3.png, Commodities: Crude Oil, Gold Transfixed on US Employment Report

Daily Chart - Created Using FXCM Marketscope 2.0




GOLD TECHNICAL ANALYSIS Prices broke higher as expected after putting in a bullish Morning Star candlestick pattern. Resistance is now at 1321.09, the 38.2% Fibonacci retracement, with a break above that targeting the 50% level at 1342.57. Near-term support is at 1294.51, the 23.6% Fib, a barrier reinforced by a falling trend line set from late August.


Commodities_Crude_Oil_Gold_Transfixed_on_US_Employment_Report_body_Picture_4.png, Commodities: Crude Oil, Gold Transfixed on US Employment Report
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Commodities_Crude_Oil_Gold_Transfixed_on_US_Employment_Report_body_Picture_4.png, Commodities: Crude Oil, Gold Transfixed on US Employment Report

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SILVER TECHNICAL ANALYSIS Prices are testing resistance at 22.25, the 38.2% Fibonacci retracement. A break higher targets the 50% level at 22.80. Near-term support is at 21.58, the 23.6% Fib, with a move beneath that eyeing a rising trend line set from late June (now at 21.15).


Commodities_Crude_Oil_Gold_Transfixed_on_US_Employment_Report_body_Picture_5.png, Commodities: Crude Oil, Gold Transfixed on US Employment Report
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Commodities_Crude_Oil_Gold_Transfixed_on_US_Employment_Report_body_Picture_5.png, Commodities: Crude Oil, Gold Transfixed on US Employment Report

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COPPER TECHNICAL ANALYSISPrices are consolidating in a Triangle chart pattern, a setup hinting at bullish continuation in this instance. A break above the formation’s top (3.324) initially targets 3.378. Alternatively, a reversal through Triangle support (3.226) aims for swing lows at 3.215 and 3.190.


Commodities_Crude_Oil_Gold_Transfixed_on_US_Employment_Report_body_Picture_6.png, Commodities: Crude Oil, Gold Transfixed on US Employment Report
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Commodities_Crude_Oil_Gold_Transfixed_on_US_Employment_Report_body_Picture_6.png, Commodities: Crude Oil, Gold Transfixed on US Employment Report

Daily Chart - Created Using FXCM Marketscope 2.0




--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


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