Crude oil future rose to a high of $61.72 in asian trade on the drop in both temperatures and US inventories.Crude oil december futures have managed to hold $59 a barrel and needs to break $64 for further gains. Temperatures in North -east USA is getting colder and if this continues winters will be colder than markets expectations in the northern hemisphere. Colder weather will prevent crude oil as well as natural gas from falling and that a short term bottom may have been formed unless there are a signs of global slowdown.
Gold is not out of the woods yet and needs to break and close over key technical resistances for further gains. It’s the rise in Zinc prices that surprised everybody yesterday, the three month London metal Exchange (LME) crossed the $4100 mark yesterday. Copper continues to under perform base metals and is a sleeping dragon. Technically speaking gold and copper are in a short term neutral territory while silver, zinc, aluminum and other precious metals and base metals are in a bullish zone. Gold will be supported by higher base metal prices.
The US dollar fell against the major currencies even before the Fed meeting after existing home sales dropped for the sixth month in a row to a lower than expected 6.18M units for the month of September. The Fed did not upgrade their concerns about inflation and instead kept the statement virtually unchanged. Though the Fed injected a more optimistic take on future growth, the lack of changes to the inflation assessment sent the dollar as well as bond yields tumbling. We continue to remain bearish on the US dollar and if the US dollar closes weaker tomorrow then it could set the pace for more losses for the rest of the year. Any US dollar weakness will support gold and silver prices..
GOLD -- DECEMBER FUTURE
Gold is trading in wider $570 - $609 range and needs to be break and close over them for $621 and $633. Initial resistance is seen at $599 and $605.20. Support at $582.20 and $577.50 with $569.40 as the key medium term support.
SILVER -- DECEMBER FUTURE
Silver needs to break $1220 for $1290. On the lower side $1157 is the key weekly support with $1122 as the key short term support.
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