The rising optimism over the increased possibility of a US interest rate rise in December has threatened Gold and led to the precious metal collapsing down to five-year lows at $1074. Gold has been a victim to sharp changes in sentiment as after appreciating over $80 on repeated pushed back US interest rate expectations in October; the metal experienced a vigorous selloff in November which may follow through to December. The direction of Gold continues to be dominated by US interest rate expectations, and with the recent robust US employment report in November, there are no signs of this coming to an end. If the Fed do move forward with a US rate hike in December, Gold sellers may be offered an invitation to send this zero yielding metal back down to the $1050 level.
WTI Oil plunged to its lowest level in over two months at $41.36 after U.S oil stockpiles climbed for the seventh week. Any hopes bullish WTI investors had regarding a potential bounce back received a heavy blow after the OPEC voiced that oil-inventory surplus was at its biggest in at least a decade. This mixture of excessive oversupply in the markets and sluggish demand for WTI oil will continue to repress prices moving forward. The OPEC meeting scheduled for December may shed some light on how the organization plans to tackle the global glut, but it remains unlikely that a cut may be implemented this year.
Commodity spotlight – GOLD
Gold is technically bearish on the daily timeframe. The 1080 target which was discussed in the previous report has been reached with a possibility of prices declining further in the future. The candlesticks are riding the outer skin of the Bollinger bands and the MACD has crossed to the downside. Previous support at 1080 may become dynamic resistance which should encourage a further decline back towards the 1050 level.
The USDCHF hit the 1.0085 level which was discussed in last week’s report. The pair is still technically bullish on the daily timeframe and a breakout above the 1.0085 may open a path to the next relevant level at 1.0250.
This pair is in the process of turning technically bearish on the daily timeframe. Prices have found some resistance below the daily 20 SMA and a potential bear flag is in the making. A breakdown below the 0.650 level may open a path to 0.8500.
The USDZAR is technically bullish on the daily timeframe. There are consistent higher highs and higher lows. Previous resistance at 14.050 may become dynamic support which should invite for a further incline to 14.500.
Silver is heavily bearish on the daily timeframe. The commodity has declined for 11 consecutive trading days and most lagging indicators suggest that prices can trade lower. Silver may trade to the next relevant level at 14.00.
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