Tuesday, 14 April 2009 21:05:47 GMT
Written by Stefan Tifigiu, CFDTrading Research
Full Article
Commodities - Energy
Crude Declines Further As US Producer Prices and Retail Sales Disappoint
Crude Oil (WTI) $49.480 -$0.570 -1.14%
Crude prices continued to decline following disappointing US Retail Sales and Producer Price Index releases. The releases suggest continued weakness in the US economy, the largest global consumer of crude. Meanwhile risk appetite, which supported oil prices in recent weeks, has begun to ease up. Sentiment is changing as some analysts are posing questions over possible “accounting tricks” which may have inflated Wells Fargo’s profit expectations. Further compounding weakness for financials will be Goldman Sachs’ repayment of TARP funds. The move is expected to strain the financial sector and have mixed results on the company as well. These two factors could dent market expectations for positive valuations at other major banks and deter any further rallies in the near future. Meanwhile, crude demand, already at twenty-year lows, is expected to decline even further. On the supply side, crude stockpiles are projected to remain at record levels. Both of these factors point sharply toward lower crude prices. Unless news is released that supports a turnaround, spurs up equity rallies and helps offset these factors, crude prices will continue to decline.
Commodities - Metals
Gold And Silver Prices Continue Declines As Inflationary Risks Wane
Gold $890.200 -$5.600 -0.63%
Gold prices declined today after disappointing retail sales and producer price data were released. The figures suggest that the influx of capital into the economy from the Treasury and the Federal Reserve has yet to impact inflation. Needless to say, longer-term buyers may be positioning to gain from these risks which will likely emerge once a turnaround is formed. These buyers will likely result in some volatility in price-action. Short-term however, risk sentiment remains the dominant influence for prices. In the interim, risk appetite will be determined by expectations for financials. As a result, market momentum will likely continue to fluctuate until more concrete news or earnings data is released. Until then gold prices will show further modest declines in the near-term.
Silver $12.690 -$0.078 -0.61%
Silver prices declined today following gold. Given silver’s industrial applications, a slow-down in the economy may begin to have an impact. As a result any price gains silver may mirror in safe-haven metals may be offset somewhat by this factor. Expect silver to show modest declines in the near-term.
