Gold - $1,250.40 // $0.55 // 0.04%
Commentary: The relentless rally in gold continues with the metal now only an arm's length away from the all-time high near $1,265. Even another day of gains in equity markets didn't stop gold from rallying with momentum ruling the day. Gold ETF holdings dipped slightly to 66.6 million troy ounces from the record 66.9 million the previous day. With little to phase this bull move, it is looking more and more likely that gold will soon test and perhaps break its all-time highs.
Technical Outlook: Positioning continues to point to an advance toward the record high at $1265.30 after the bulls took out resistance at the $1,243.27 level. This juncture is now acting as support and is reinforced by the bottom of a rising channel that has confined prices since late July. Alternatively, a reversal lower that sees prices slip back below $1,243.27 will target initial support at $1,215.47.
Longer term, gold positioning reveals bearish cues with clear negative RSI divergence hinting that a major top may be taking shape. Confirmation of a downward reversal in line with our fundamental outlook requires a weekly close below a rising trend line set from the swing bottom in late 2008, now at $1,198.36.
Silver - $19.60 // $0.05 // 0.26%
Commentary: Silver rose swiftly on Thursday, adding $0.29, or 1.5%, as prices have now increased for seven of the last eight sessions. The gold/silver ratio moved lower to 63.8. For the last two weeks silver has outperformed gold, bringing the ratio toward the lower end of this year's 60 to 71 range.
Technical Outlook: Prices took out resistance at $19.54, with the door now open to challenge the mid-May high at $19.83. The $19.54 level is now acting as near-term support, with a break below that targeting $19.28 and the $19.00 figure.
Crude Oil (WTI) - $74.75 // $0.27 // 0.36%
Commentary: Crude oil added $1.11, or 1.5% on Thursday after a rig exploded in the shallow waters of the Gulf of Mexico. Early in the morning crude oil was modestly lower, but then proceeded to rebound after news came out about an explosion on a rig in the GOM. It turns out that the explosion actually occurred on a production platform rather than a drilling rig, but nevertheless, the important thing is that "there was no blowout, no explosion, no injuries, no spill," according to Mariner Energy, the operator of the platform. That being said, the upward move in crude oil was maintained throughout the day with crude oil settling close to the highs, aided by a late-day rally in US equity markets. On Friday all eyes will be on the US nonfarm payrolls figures, which are expected to show that the economy shed 105,000 jobs in total in the month of August, but added 40,000 jobs in the private sector specifically. The unemployment rate is expected to tick up to 9.6% from 9.5%.
Technical Outlook: Prices remain wedged between support-turned-resistance at the bottom of a rising channel set from late May (now at $76.34) and a horizontal barrier at $71.09. A move above immediate resistance exposes the $80.00 figure while a break lower clears the way for a test of the previous bottom at $68.01.
lya Spivak is currency strategist and and Sumit Roy is a researcher for DailyFX.
