The gold markets were fairly volatile on Thursday, but in the end found price rising slightly. There is a battle between Euro weakness, and Dollar strength. As people buy the Dollar, it typically will punish the price of gold. This is essentially what is happening in the gold market today. However, other traders will buy gold as a hedge against the Euro, so this makes for a very back-and-forth market. Because of this, although we think the chart looks more bullish than bearish – we are avoiding this contract until it settles down.
The natural gas market fell apart on Thursday, even with a less than expected build in inventories. It appears the market is more focused on the strength of the Dollar, and the lack of economic growth we may be entering. Because of this, and the still large supply, the market is still bearish in a large range between $5 and $4.20 and should continue to be. We think that selling rallies might be the way to go.
The CL contract had a bearish day on Thursday, but still sits right at support. It has to be said that after the Wednesday sell off, one would have expected a bit of a bounce. It never came. Because of this, although we are at support, we are getting more and more bearish on oil. If we can break below the $94 level, we would have to start thinking about shorting this market. This of course would be based upon price action for the day as well. For now – we recommend staying flat.
