Commodities Near Their Range Highs

Gold is pushing at its range highs at 1262 helped by the fact that there has been a general risk on sentiment in the markets which has in turn led to some USD weakness all around. As you can see on the hourly chart, the 200 SMA comes in at 1256 and there has been a smart bounce from there as far as 1263 and the instrument sits at 1262 as of this writing. It has been consolidating in the 1250-1263 range for the past few days as the market awaits the next impetus and the direction to make a quick move. As we have been saying for the past few days, we expect a move towards 1300 anytime in the short term and the price action there would tell us its next course of action. Yesterday, we saw the release of US CPI which was largely on expected lines and hence it did not do anything to push the markets in any specific direction as yet. Looking ahead to today, though is some news to be released from the UK and US, we believe that this would not do much to change the course of the gold price and we expect some more consolidation between 1250 and 1263 for the next couple of days atleast.

Oil has also been sitting at the range highs trying its best to eat up as many sells as possible but the more it eats up, the more sells seem to be popping up as it finds the region from $52 to $53 something of a brick wall which is hard to break. The official oil inventory data is expected to be released during the US session later on today and this, along with the Canadian Monetary policy report, could be a chance for the bulls to wake up from their slumber over the last few days and make a serious attempt in breaking the wall. Unless it is broken, we expect oil to continue to consolidate and we advice our users to stay away till the next direction is clear.

Silver, as usual, has largely followed the gold price in moving up slowly from its range bottom and has been making an attempt at the 17.7 range top. Its price action has almost been a mirror image as that of gold as both the commodities sit near their range tops and continue to consolidate.