Commodities Technical And Fundamental Analysis For July 25, 2011

Light Sweet Crude

The CL contract fell on Friday, but managed to bounce yet again. The currently level, just under $100 suggests that we are going to have a fight to get above that mark, but the fact that the lows keep getting higher there is a real chance at a break out. A close on the daily chart above $100 gets us buying. We also will buy on dips.


Brent looks very similar to the CL market, but is focusing on the $120 level. The pressure certainly seems to be to the upside, and the odds are we go higher. Because of this, we buy closes above $120, and any dips as they come.

Oil Fundamental Analysis for July 25, 2011

Crude oil prices dropped back on Friday, as pessimism resurfaced in markets despite an agreement to help Greece with its debt problems, while U.S. lawmakers are yet to reach an agreement to raise the debt ceiling, which casted doubts among traders and pushed crude oil prices lower. Moreover, data from China on Thursday suggested demand is easing, which also contributed to the drop in prices on Friday.

Traders will be focused on the latest developments in the United States regarding the debt ceiling deal, since the economic calendar lacks any major fundamentals from the United States, however, if nothing new is released, we should expect crude oil prices to trade within a limited range and possibly with a downside bias on Monday.

Natural Gas Technical Analysis for July 25, 2011

The natural gas markets rallied during the day on Friday, but failed to hold those gains. The $4.40 level did act as support, and has held the market up. However, this candle for Friday doesn’t look good, and we are waiting to see if the larger $4.40-$4.20 zone holds for the market. We are looking for supportive candles in that area to buy.

Natural Gas Fundamental Analysis for July 25, 2011

Natural gas prices rebounded to the upside on Friday, as hot weather conditions in Ease Coast cities in the United States boosted speculations of rising demand for power-plant fuel to meet rising cooling demand.

Expectations of milder weather conditions early next week should put negative pressure on natural gas prices on Monday, since it will lead to speculations of lower demand for power-plant fuel.

Gold Technical Analysis for July 25, 2011

The gold markets rose on Friday, continuing the recent range bound conditions that revolve around the $1,600 mark. The truth is that this market is pretty overbought, and the traders seem to be taking a break. There is massive headline risk in this market as every time the news out of D.C. suggests that the US government can reach a deal on the debt ceiling, the market sells off. The reality is that there is a good chance there will be an agreement, and the market will sell off. Once that happens, we are probably going to be presented with a buying opportunity. Until then this market is going to be hectic.

Gold Fundamental Analysis for July 25, 2011

Gold prices rose on Friday, as despite a European agreement to help Greece with its swelling debt problem, yet investors were still concerned that the European debt crisis will continue to spread across the region, as traders fear more prominent nations in the Euro Zone area will face similar difficulties including Italy and Spain, the Euro Zone’s third and fourth largest economies respectively.

Earlier on Friday optimism was the dominant theme among traders, however, doubts started to resurface again over the outlook of the European debt crisis, while news that U.S. lawmakers are close to agreeing a deal to raise the debt ceiling did little to calm traders, as they continued to target lower yielding and safe assets, which boosted demand on gold, and pushed prices above $1600 an ounce.

Economic fundamentals will be absent from markets on Monday , and accordingly, we shouldn’t expect strong movements, and that means that gold prices will trade within a limited range, albeit with an upside bias, especially if U.S. lawmakers fail to reach an agreement over the weekend, however, an agreement to raise the debt ceiling could send gold prices lower, since demand for safe assets including gold will drop, and that will push gold prices lower.

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