Gold Daily Fundamental Analysis
Gold ended last week with strong gains and starts Monday with expected volatility as the pessimism remains dominant and with light fundamental load the metal might be pressured by some correctional moves.
The focus with the beginning of the week will be again on the debt crisis as the market trades pessimistically in light of the jobs report, as Asian markets are expected to start Monday with a downbeat reaction to the weak numbers.
Attention will also be given to the euro area finance ministers meeting in Brussels.
The meeting holds strong importance to the market since finance ministers are expected to discuss the new round of aid for Greece and with the fear of a selective default to be given to Greece under the conditions of the private sector’s involvement.
S&P last week warned of this possibility so did other rating agencies, yet the problem is that news reports suggested that no agreement has been reached yet on their participation on the bailout which might cloud the talks this meeting and end with another opening ending and no news on the bailout.
Investors will continue to focus on comments from the finance ministers as the market trades in the wake of the abysmal jobs report, leaving the pessimism the dominant theme which is still upside support for gold unless a strong breakthrough is seen on the bailout for Greece which might ease the fears and allow gold to correct the upside rally seen last week.
Crude Oil Daily Fundamental Analysis
Crude oil prices fell heavily on Friday after the jobs report showed U.S. employers added only 18,000 jobs in June well below expectations of 105,000 added jobs, which spread pessimism among traders and increased risk aversion in markets, as investors sold higher yielding assets including crude oil and bought safe assets and lower yielding currencies including the USD, which pressured crude oil prices to drop heavily and nearly erase all of last week’s gains.
If pessimism continues to dominate financial markets, we should expect crude oil prices to remain under pressure, noting that markets lack any major fundamentals on Monday, and accordingly, we expect calm trading to prevail in markets, but overall we expect crude oil prices to remain under pressure.
Monday July 11:
The day lacks fundamentals from the euro zone and the United States yet the focus will be on the euro area finance ministers meeting in Brussels as they are to discuss the bailout for Greece amid recent default warnings from rating agencies on the private sector participation in the new package.
Natural Gas Daily Fundamental Analysis
Natural gas prices rose on Friday to recover some of Thursday’s losses after the EIA report for natural gas inventories showed a bigger than expected rise. Nonetheless, weather forecasts suggest that temperatures next week will be higher than their average for this time of the year in Midwest of the United States, which pushed natural gas prices higher on Friday.
Expectations of warm weather conditions could push natural gas prices higher, since it will increase speculations of rising demand for power-plant fuel to meet cooling demand.
