Gold Daily Fundamental Analysis
Gold continued the tight range trading most of Tuesday as the wide spread optimism that the Greek crisis will be contained and the correction for commodities and equities stripped the metal of its haven appeal and was only supported on the back of a weak dollar.
The softer dollar bolstered the metal and restrained it from losses amid broad gains for equities, currencies and commodities, as the market started to unwind some of the pessimism over the outlook for the debt crisis and the global recovery.
We can see the focus still on the debt crisis and with investors realizing the systemic risk of Greek default and accordingly realizing that it will not be allowed to fail. The debate over the austerity package continues and a Wednesday vote is expected and accordingly the mixed sentiment and the violent ride between optimism and pessimism will still dominate the session.
Gold will continue to fluctuate on Wednesday with the high chances that Asian stocks will trail the upbeat sentiment in the market despite the looming vote from the Greek parliament. We still see gold likely to fluctuate on the pending Greek vote in a tight range between gains and losses and with high volatility yet with the optimistic state seen the metal will likely retain an upside bias on the softer dollar.
If the vote passes on the austerity measures, the dollar will continue to weaken and compensate some of the lost appeal for gold as a haven, which will ease on the lower prospects of default. Yet if the parliament blocks the vote a violent selloff will be seen across the board and gold might rise only temporarily on the news and haven demand and then will follow with a strong slump on liquidations that will stem to cover the losses endured across the board from equities, commodities and all the way to currencies and bonds!
It is likely to be a rough day for markets on Wednesday and caution will be seen with mixed trading ahead of the final confirmation from the Greek parliament.
Natural Gas Daily Fundamental Analysis
Natural gas rose on Tuesday, as traders continued to speculate that higher than average temperatures in the United States next week will boost demand for power-plant fuel, and that pushed natural gas prices to rise.
We should expect natural gas prices to extend the rise over the coming period on expectations of warmer than average weather conditions, as demand for power-plant fuel will increase, since that cooling demand will rise, and that will support natural gas prices to rise.
Crude Oil Daily Fundamental Analysis
Crude oil prices rebounded to the upside on Tuesday, as optimism that a solution to Greece’s debt crisis is approaching overshadowed the worse than expected drop in U.S. consumer confidence, where risk appetite increased among investors as they targeted higher yielding assets, which boosted demand for crude oil and pushed prices higher.
We advise traders to remain cautious amid the huge uncertainty still surrounding the outlook, since confidence in markets remains rather fragile, nonetheless, if the Greek parliament approves the austerity plan, we should expect crude oil prices to extend the rise. We should also note that the EIA report for crude oil inventories will play a role in determining prices on Wednesday.
