Expert Opinions

August Gold closed higher on Wednesday, driven higher by the weakening Dollar as investor sentiment shifted to a “risk-on” mentality. Although the move was impressive in the wake of last week’s sharp sell-off, the rally looked tentative at times which is typical for a counter-trend move. This morning the Greek Parliament voted to approve austerity measures which are likely to open the door for the first tranche of financial aid pledged by the European Union and the International Monetary Fund. The news was bullish for the Euro, gold and equities but proved to be bearish for the U.S. Dollar. A lower U.S. Dollar traditionally makes commodities priced in Dollars attractive. This is the main reason for the strength in gold, silver and crude oil. If the trend in the Dollar remains down then August gold is likely to firm. Otherwise it may become rangebound. Although traders often buy gold as a hedge against a calamity or uncertainty, this hasn’t been the case the...

August Crude Oil rallied on Wednesday, but it wasn’t only the passing of the Greek austerity measures or the early strength in the Euro or the weaker U.S. Dollar that gave it a shot of adrenaline today, it was good old supply and demand. After trading firmer most of the night, crude oil got a boost early in the trading session on speculation that Greece’s Parliament had the votes to pass the strict austerity measures that were needed to secure the first tranche of bailout money from the European Union and the International Monetary Fund. The driving force of the early move was fueled by the stronger Euro and the weaker Dollar. The strength in the Euro led to a “risk-on” scenario while the weaker Greenback meant cheap prices for commodities that were priced in Dollars like crude oil. After Greece announced that the austerity measures had received a favorable vote, the Euro faltered and began to weaken in what became a “buy...

  August Crude Oil is trading higher this morning as traders are anticipating a favorable outcome to the Greece austerity vote.  A favorable vote is expected to drive the Euro higher and the Dollar lower. A cheaper Dollar should translate into higher commodity prices, thus driving up demand for crude oil. Although traders anticipate a rally in the Euro, no one is certain how high it will rally given the good news because much of the move may already be priced into the market. Following the initial thrust in the Euro, the single currency is expected to run into key retracement and resistance areas which could reverse the intraday trend. A rally in the Euro whether it is short-term or long-term will mean that investors will put risk back on. This will be supportive for the crude oil market. Like the Euro, crude oil may be susceptible to a quick reversal down should fundamental and technical conditions shift suddenly. In addition to the anticipated...

  August Gold rallied on Tuesday under thin trading conditions. Volume was light and the rally may have been triggered by short-covering ahead of Greece’s austerity vote rather than fresh buying.  Although the close above the psychological $1500 level could develop into something important, at this time it doesn’t mean too much as investors clearly have a little too much on their minds to worry about price levels. Optimism over the potential favorable austerity vote in Greece was the key driving force today. Gold has disappointed investors and traders recently because of its lack of follow-through to the upside in the midst of a potential currency crisis and the thin trading conditions that made it appear the market has been abandoned by the big boy traders. Uncertainty is plaguing this market and keeping bullish traders on the defensive. It sounds funny since many believe that financial uncertainty is one of the reasons why investors throw their money at the gold market. During...

  The tight trading range in the August Crude Oil the past two days suggests that the market is not too worried about Wednesday’s Strategic Petroleum Reserve auction but rather the outcome of the austerity vote in Greece later this week. For the second time in a week, Greece Prime Minister George Papandreou’s role as a leader will be called into question. Last week he was fighting for his career while campaigning for a vote of confidence, this week he is trying to persuade Parliament to approve strict austerity measures designed to prevent a Greek bond default. By getting these measures passed, the European Union and the International Monetary Fund is expected to release the first tranche of aid to Greece so that the country can avoid default. Last week crude oil sold off sharply after the U.S. and its allies announced the release of 60 million barrels of crude oil over the next 30 days from their Strategic Petroleum Reserves. Traders acted...

  August Gold was under pressure most of the day on Monday following last week’s almost $40 sell-off.  Overnight gold is trading in a tight range with a slight bias to the upside. The market is inside yesterday’s range of $1506.10 to $1490.80.  The inside price action often indicates impending volatility or investor uncertainty. The main trend turned down on the daily chart last week when gold broke a swing bottom at $1511.40. In addition to breaking the swing bottom, the market also broke through a long-term uptrending Gann angle from the late January bottom at $1314.20. This angle comes in at $1522.20 today.  The more time this market spends under this angle, the weaker it is expected to become. While breaking the swing bottom and the Gann angle are signs of weakness, the market is finding some support on a 61.8% retracement level of the $1464.10 to $1559.30 range at $1500.47.  Unless August Gold can regain this level and establish strong support,...

August Gold is trading slightly better overnight following a sharp break in New York on Thursday. Gold plunged over $30 on Thursday as the U.S. Dollar rose sharply. The rally in the Dollar and subsequent breaks in equities, the Euro and gold was triggered on the news that the U.S. and other major industrialized nations would release up to 60 million barrels of oil from their strategic reserves on the open market over the next 30 days. The move is an attempt to provide stimulus to the global economy that is on the brink of slowing down. After popping through recent resistance at $1555.00, Gold began to weaken the day before after Fed Chairman Ben Bernanke announced that there would be no new stimulus plan while acknowledging that the economy was slowing down. The news that stimulus was being withdrawn and that no new plan was in the works underpinned the U.S. Dollar putting some selling pressure on the Gold. Thursday’s news...

August crude oil fell sharply on Thursday following a concerted effort by the U.S. and its allies to drive oil prices lower and stimulate the global economy. The move to release up to 60 million barrels of crude oil into the open market drove August futures prices down over $4.00 to $89.69. The drop in August Crude Oil took out the recent bottom at $91.51, reaffirming the downtrend and testing a major  61.8% retracement level at $90.13.  The technical bounce off of this Fibonacci retracement level was impressive, but not enough to reverse the market back to up. The market finished the day lower, but a little more than $2.00 off of its low. In conjunction with Federal Reserve Chairman Bernanke’s news conference on Wednesday where he acknowledged the slow down in the U.S. economy, the move to release the oil served as stimulus for a fledgling economy. In an effort to avoid a global economic slowdown, the rest of the world’s...