Gold Daily Fundamental Analysis
Gold held its grounds on Thursday after ending with gains on Wednesday amid heavy market selloff and losses across the board. The strong dollar pressured the metal yet it remained marginally strong on the worsening outlook for the global recovery and deepening debt crisis.
Gold found support with the huge selloff in the market and amid rising pessimism and fears over the outlook for Greece and the seemingly inevitable default.
Haven demand remains the main support for the metal, where even the dollar’s downside pressure is being contained amid a high state of alert in the market. The market remained under heavy selling pressures on Thursday as fears over political instability in Greece might restrict the passage of the new austerity plan needed to secure the bailout loans.
Papandreou is forming a new government and will go for a confidence vote in parliament, which if did not pass might have devastating downside pressure on the market as investors price a messy default.
Greece’s situation is worsening and the outlook is seen eminent default for now! The sentiment is to remain bearish for quite a while over the debt crisis with the EU summit next week and Friday will be the beginning of speculation.
Gold is still expected to remain buoyed by the prevailing negativity in the market and pessimism, with heavy selling on commodities, currencies, and equities. With the ongoing losses the metal might be pressured on liquidations to cover the losses shall the panic prevail into Friday’s end of the week session.
Haven demand for now is supporting the metal, yet an actual default by Greece might actually prove to be hazardous on the metal and might only prove good for the dollar opposed to everything else! The metal might be pressured in that case with heavy liquidation from institutional investors and parties exposed to Greek debt, which then will send the metal lower and that is why cautious trading is seen on the metal and will likely prevail on Friday awaiting any calming news from Greece and the new government.
Natural Gas Daily Fundamental Analysis
Natural gas prices remained under pressure on Thursday, where speculations of milder weather conditions in the United States continued to weigh down on prices on expectations of lower demand for power-plant fuel. Moreover, the EIA released the natural gas inventories for the week ending June 10, where natural gas stockpiles rose 69 billion cubic feet in line with expectations and following the prior rise of 80 BCF in the prior week.
Expectations of milder weather conditions has been pushing natural gas prices lower throughout this week, and we should expect natural gas prices to extend the drop on Friday.
Crude Oil Daily Fundamental Analysis
Crude oil prices fell heavily on Wednesday and continued to fall on Thursday, as pessimism over the outlook for global growth continued to weigh down on confidence in financial markets, sparking a selling wave on commodities including crude oil amid concerns over the outlook for demand due to the recent slowdown in economic activities in major economies around the globe.
Nonetheless, crude oil losses were limited on Thursday after the better than expected data from the United States, as jobless claims dropped better than expectations, while housing data signaled better than expected performance, yet the contraction witnessed in the Philly Fed index only added to concerns over the outlook of the U.S. economy.
We maintain our cautious but still bearish outlook for crude oil prices, since investors will be following the recent developments around global economies, and especially in the United States economy, as more bad economic data will put further downside pressure on crude oil prices.
Friday June 17:
At 12:30 GMT, Canada will release the wholesale sales index for the month of April, where wholesale sales increased by 0.1% back in March.
At 13:55 GMT, the University of Michigan will release the preliminary estimate for confidence for the month of June, where consumer confidence is expected to rise to 74.5 from 74.3.
At 14:00 GMT, the U.S. will release the leading indicators index for the month of May, where the index is expected to rise by 0.2% after falling by 0.3% in April.
