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HANSEN: WHAT NEXT FOR GOLD AND OIL
Commodities rise for a second week driven by a recovery in precious metals.
Gold having the best weekly performance since August. But what now? Ole Hansen says the near term outlook is back to neutral with a sharply weaker dollar and lower bond yields lending support along with an expected delay to tapering now that "the US budget can has been kicked down the road". He prefers gold over silver as long as the ratio stays above 59.5. But a break below USD1290 could signal renewed weakness.
Energy markets fell due to increased supply and near term worries about the economic outlook and that's reflected in Ole's outlook of neutral to bearish. He says improved supply offsets the weaker dollar. Brent looks like it could have another leg down towards USD105 from where support should be re-established. WTI has found support ahead of USD100 but the near term outlook doesn't offer much in terms of support as domestic inventories climb.
The agriculture sector was supported by short covering in grains while sugar had a seventh weak of gains. A different story for coffee, with Robusta down five percent. The harvest in Vietnam, the world’s largest producer of the robusta variety, begins later this month and analysts are looking for a 10 percent jump in the crop, driving prices to a three year low.
02:08 minutes
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