Commodities: Crude Oil, Gold Look to US House Vote for Direction

Crude oil and gold may rise as the US House of Representatives votes to suspend the “debt ceiling” through mid-May but follow-through is likely to be limited.

Talking Points

  • Commodities Tread Water as Markets Wait US House Vote on Debt Ceiling
  • Risk Appetite Boost from Fading US “Default” Fears May Prove Fleeting

Commodities are treading water in early trade, reflecting standstill on the risk sentiment front ahead of a vote in the US House of Representatives to suspect the federal spending limit (the so-called “debt ceiling”) until the May 19. This would allow the US Treasury to continue to borrow at whatever pace necessary to accommodate its liabilities until that time. The newswires report that the move is intended to refocus the debate in Washington, DC on the “sequester” spending cuts initially intended to trigger with the “fiscal cliff” in January and pushed out until March 1.

On balance, a decision to delay a tussle on the debt ceiling may yield a small pickup in risk appetite (and by extension in commodities) because the threat of a pseudo-default will be reduced for now. This will relieve investors worrying about the difficult-to-forecast implications of a US that is technically unable to borrow not because the market will not lend to it (a “real” default) but because of a self-imposed legislative restriction.

Crucially, failure to raise the debt ceiling would say less about the creditworthiness of the US than it would about the intractable deadlock on the political front, particularly at a time when swift policymaking is so critical. With that in mind, any boost to risk appetite from delaying the decision may be temporary at best. Indeed, delaying the fight seems hardly encouraging considering it does little to resolve the issue, merely shifting the spotlight to a different venue (the “sequester” battle) where Congress’ factitious state may be put on display.

WTI Crude Oil (NY Close): $96.68 // +0.64 // +0.67%

Prices continue to drift higher after taking out support-turned-resistance at 94.61. Near-term resistance is now at 98.21, marked by the top of a rising channel set from mid-December 2012. A break above that aims for the September 14 2012 close at 98.99. Near-term support is now in the 94.61-90 area.

Commodities_Crude_Oil_Gold_Look_to_US_House_Vote_for_Direction_body_Picture_4.png, Commodities: Crude Oil, Gold Look to US House Vote for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1692.70 // +2.65 // +0.16%

Prices narrowly edged above resistance at 1690.39, the 38.2% Fibonacci retracement, exposing the 50% level at 1710.37. This is reinforced by a falling channel top, now at 1707.40. A push above 1710.37 targets the 61.8% Fib at 1730.35. The 1690.39 mark has been recast as support, with a reversal back below that eyeing the 1650.74-57.35 area.

Commodities_Crude_Oil_Gold_Look_to_US_House_Vote_for_Direction_body_Picture_3.png, Commodities: Crude Oil, Gold Look to US House Vote for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

Spot Silver (NY Close): $32.24 // +0.23 // +0.72%

Prices are testing resistance at 32.41, the 61.8% Fibonacci retracement level. A break above that aims for the 76.4% level at 33.17. Near-term support is at 31.80, the 50% Fib. A reversal back below that targets the 38.2% retracement at 31.19.

Commodities_Crude_Oil_Gold_Look_to_US_House_Vote_for_Direction_body_Picture_2.png, Commodities: Crude Oil, Gold Look to US House Vote for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video

COMEX E-Mini Copper (NY Close): $3.706 // +0.026 // +0.71%

Prices broke above resistance at 3.689, the 38.2% Fibonacci expansion, exposing the 50% level at 3.717. A break above that targets the 61.8% Fib at 3.745. Alternatively, a reversal below support aims for the 23.6% expansion at 3.655.

Commodities_Crude_Oil_Gold_Look_to_US_House_Vote_for_Direction_body_Picture_1.png, Commodities: Crude Oil, Gold Look to US House Vote for Direction

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, please CLICK HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Japan pledges $30 billion for Africa over next three years Reuters - 23 minutes ago

    Japanese Prime Minister Shinzo Abe told African leaders on Saturday that his country will commit $30 billion in public and private support for infrastructure development, education and healthcare expansion in the continent. Resource-poor Japan has … More »

  • Iran detects malware in petrochemical plants, says not linked to recent fires Reuters - 36 minutes ago

    Iran has detected and removed malicious software from two of its petrochemical complexes, a senior military official said on Saturday, after announcing last week it was investigating whether recent petrochemical fires were caused by cyber attacks. … More »

  • A monumental task: Getting Mainers to support a new park
    A monumental task: Getting Mainers to support a new park Associated Press - 56 minutes ago

    Among the empty storefronts on once-bustling Penobscot Avenue, longtime resident Jean McLean stood in her art gallery, the sole employee left at a business that once had three. "Right now, it's pretty ... … More »

  • Exclusive - Iraq plans to sell oil through Iran if talks with Kurds fail Reuters - 1 hour 30 minutes ago

    Iraq's government would consider selling crude through Iran should talks with the autonomous Kurdish region on an oil revenue-sharing agreement fail, a senior oil ministry official in Baghdad told Reuters. Iraq's State Oil Marketing Organisation … More »

  • Iraq willing to play active role in propping up oil prices - minister
    Iraq willing to play active role in propping up oil prices - minister Reuters - 1 hour 43 minutes ago

    Iraq is willing to play an active role within OPEC to support oil prices, its oil minister Jabar Ali al-Luaibi said on Saturday, without clarifying whether it was prepared to back a possible agreement to freeze output. "Iraq is seeking to play an … More »

  • Exlusive - Iraq plans to sell oil through Iran if talks with Kurds fail
    Exlusive - Iraq plans to sell oil through Iran if talks with Kurds fail Reuters - 1 hour 48 minutes ago

    Iraq's government would consider selling crude through Iran should talks with the autonomous Kurdish region on an oil revenue-sharing agreement fail, a senior oil ministry official in Baghdad told Reuters. Iraq's State Oil Marketing Organisation … More »

  • When death comes to stay: one Italian village's story
    When death comes to stay: one Italian village's story AFP News - 2 hours 17 minutes ago

    Nowhere was hit harder by the earthquake that brought death and devastation to a remote corner of central Italy this week than Saletta. Fewer than 20 people are permanent residents of the picturesque hamlet. On Wednesday, with the population … More »

  • Stronger Case for Fed Rate Rise Increases Volatility in Asia Bloomberg - 2 hours 56 minutes ago

    The Fed next meets Sept. 20-21 just hours after the Bank of Japan announces the results of its comprehensive review and decides policy, with Bank of Japan Governor Haruhiko Kuroda saying the review wouldn’t lead to a shrinking of policy. "A rate … More »

  • Japan’s Abe Dangles $30 Billion at African Leaders in Nairobi Bloomberg - 3 hours ago

    The Asian economy’s future investment in the continent of 1.2 billion people shows it has “faith in Africa’s future,” Abe told African leaders gathered in Kenya’s capital, Nairobi, for the sixth Tokyo International International Conference on … More »

  • Japan PM pledges to invest $30 bn in Africa by 2018
    Japan PM pledges to invest $30 bn in Africa by 2018 AFP News - 4 hours ago

    Japan will pour $30 billion (27 billion euros) in investment into Africa by 2018, including $10 billion in infrastructure development, Prime Minister Shinzo Abe said on Saturday at a summit in Nairobi. "When combined with the investment from the … More »

  • US, Russia move closer to new Syria ceasefire after talks
    US, Russia move closer to new Syria ceasefire after talks AFP News - 5 hours ago

    Washington and Moscow have made key steps towards agreeing a new ceasefire in Syria, but a final deal has not been reached, US Secretary of State John Kerry and his Russian counterpart said after talks Friday. Kerry and Russian Foreign Minister … More »

  • VTTI says it resumes operations at Malaysia terminal Reuters - 8 hours ago

    SINGAPORE, Aug 27 (Reuters) - VTTI, the storage unit of world's largest oil trader Vitol, said late on Friday it has resumed operations at its Malaysia terminal ATT Tanjung Bin (ATB). "The suspension ... … More »

  • Most Read on Bloomberg: Good-But-Busted ETFs, Drifting Stocks Bloomberg - 9 hours ago

    (Bloomberg) -- The most-read Bloomberg News reports from the past week are listed below. The rankings are based on daily statistics through Aug. 27. … More »

  • China July industrial profits rise, buoyed by increased sales, falling costs Reuters - 10 hours ago

    Profits earned by China's industrial firms grew at their fastest pace in four months in July, aided by a pick-up in sales and reduced costs, the statistics bureau said on Saturday. Profits in July rose 11.0 percent to 523.01 billion yuan, the … More »

  • 4 Lessons I Learned After Marrying My Foreigner Wife DollarsAndSense.sg - 11 hours ago

    Discuss your past. Discuss your future. The post 4 Lessons I Learned After Marrying My Foreigner Wife appeared first on DollarsAndSense.sg. … More »

  • Business Highlights Associated Press - 14 hours ago

    ___ Yellen suggests rate hike is coming but offers no timetable Federal Reserve Chair Janet Yellen said Friday that the case for raising interest rates has strengthened in light of a solid job market and ... … More »

  • California governor signs bill banning coal-export funding Associated Press - 14 hours ago

    California Gov. Jerry Brown signed legislation Friday banning state transportation funding for new coal export terminals. The bill represents a victory for environmentalists as they campaign aggressively ... … More »

  • Stada shareholder AOC pushes through board reshuffle
    Stada shareholder AOC pushes through board reshuffle Reuters - 14 hours ago

    Stada (STAGn.DE) shareholder Active Ownership Capital (AOC) succeeded in convincing stock owners of the German drugmaker to vote off its supervisory board chairman in a voting marathon, but the activist investor fell short of its goal of replacing … More »

  • Dollar rises following Yellen remarks on rate hikes AFP - 15 hours ago

    The dollar rose Friday against the euro, the yen and the British pound following remarks from the US central bank favoring a near-term increase in interest rates. In a much-anticipated address, US Federal ... … More »

  • Global markets drift after Yellen speech
    Global markets drift after Yellen speech AFP News - 15 hours ago

    European and US equities markets were split on Friday after US Fed chief Janet Yellen suggested interest rates could rise in the near-term. In words carefully parsed by market watchers, Yellen said recent months had seen conditions in the US … More »

  • How the Dow Jones industrial average fared on Friday Associated Press - 16 hours ago

    Stocks ended on a weak note Friday after Federal Reserve officials said the case has strengthened for raising interest rates above the super-low levels that have helped fuel a seven-year bull market. Phone ... … More »

  • Stocks end mostly lower after Yellen speech
    Stocks end mostly lower after Yellen speech Associated Press - 16 hours ago

    Stocks ended mostly lower on Friday after Federal Reserve officials said the case has strengthened for raising interest rates above the super-low levels that have helped fuel a seven-year bull market. ... … More »

  • UN ready to help Colombia peace deal
    UN ready to help Colombia peace deal AFP News - 16 hours ago

    The UN Security Council on Friday warmly welcomed the historic peace deal reached between Colombia's government and FARC rebels, and pledged to help ensure the agreement takes hold. The council met behind closed doors two days after the Bogota … More »

  • Kerry, Lavrov hold marathon Syria talks
    Kerry, Lavrov hold marathon Syria talks AFP News - 16 hours ago

    US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held marathon talks in Geneva on Friday for an expected push towards resuming peace talks for war-ravaged Syria. Asked during a break how the meeting was proceeding, Lavrov … More »

  • US stocks mixed after Yellen says picture firming for rate hike AFP - 17 hours ago

    US stocks were mixed on Friday after Federal Reserve Chair Janet Yellen said the case for a rate hike is strengthening, raising expectations of a move by year-end. Trade was fairly quiet as Yellen also ... … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.129+0.001+0.78%
    N21.SI
    1.855-0.040-2.11%
    MC0.SI
    2.84+0.02+0.71%
    C52.SI
    4.22-0.05-1.17%
    Z74.SI
    0.58-0.01-1.69%
    5TP.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.29+0.08+38.10%
    5VI.SI
    0.36+0.07+22.03%
    BPF.SI
    0.192+0.030+18.52%
    AYD.SI
    0.27+0.04+17.39%
    BLU.SI
    0.40+0.05+14.29%
    BFK.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.205-0.055-21.15%
    BTJ.SI
    0.34-0.06-15.00%
    BCD.SI
    0.39-0.06-13.33%
    AYB.SI
    0.31-0.04-11.43%
    5VP.SI
    0.24-0.02-9.43%
    BAZ.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3582+0.0051+0.38%
    USDSGD=X
    1.5196-0.0071-0.47%
    EURSGD=X
    1.7809-0.0034-0.19%
    GBPSGD=X
    74.6820+0.437+0.59%
    SGDJPY=X
    5.7047-0.0235-0.41%
    SGDHKD=X
    2.9663+0.0023+0.08%
    SGDMYR=X
    9,748.1885-70.3965-0.72%
    SGDIDR=X
    4.9062-0.0141-0.29%
    SGDCNY=X
    1.0263-0.0043-0.42%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,324.00-0.60-0.05%
    GCZ16.CMX
    18.63+0.14+0.76%
    SIU16.CMX
    95.80-0.72-0.74%
    ^XAU
    2.080.00+0.10%
    HGU16.CMX
    47.29-0.04-0.08%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.24+0.08
    ^FVX
    1.63+0.06
    ^TNX
    2.30+0.03
    ^TYX