CN:Crude Oil and Gold to Extend Gains on Greece Budget Vote
Commodities - Energy
Crude Oil Breaks Out Ahead of Greek Budget Vote
WTI Crude Oil (NY Close): $92.89 // +2.28 // +2.52%
Needless to say, the outcome of the Greek parliament vote on a new austerity package - a scheme including tax increases, spending cuts and government asset sales - is in focus today. As we discussed in detail earlier in the week , last week's successful confidence vote that allowed Prime Minister George Papandreou and his cabinet to remain in power make today's proceedings largely ceremonial. Still, market confidence is likely to get a boost from the outcome as a degree of uncertainty about the current environment is removed, pushing crude prices higher along with the spectrum of risky assets. Key resistance has already been overcome at $92.11 - the intersection the 61.8% Fibonacci extension level and a falling channel top - exposing $94.49 from here. Official DOE weekly inventory figures are also on tap.
Commodities - Metals
Gold Begins Recovery Amid US Dollar Weakness
Spot Gold (NY Close): 1501.40 // +3.35 // +0.22%
As we said yesterday , gold appears likely to follow risky assets higher into the Greek budget vote, with a favorable outcome that boosts overall sentiment likely to weigh on the US Dollar as the safe-haven du jour over recent weeks. Needless to say, gold is priced in terms of the greenback on global markets, so a decline in the US currency puts de-facto upward pressure on the yellow metal. A bounce from support at $1495.92 is already underway targeting initial resistance at $1509.49 and $1534.55, the 38.2% Fibonacci extension level and the underside of a previously broken rising channel, respectively.
Spot Silver (NY Close): $33.95 // +0.37 // +1.09%
Prices are recovering from support at a falling channel bottom to target $34.72 - the 23.6% Fibonacci extension level. As with gold, a recovery in risk appetite driven by the Greek budget vote that weighs on the safe-haven US Dollar is likely to continue driving near-term upward pressure. A break above immediate resistance exposes targeting $36.29.
