Premium

Last Friday marked the third week of losses for industrial metals which turned today with the U.S. market’s bounce. Europe’s crisis along with China’s slowdown has taken roughly 4.5% of equity out of industrial metals.

Many analysts are beating the war drums to jump back into the gold market – are they right? Maybe. The one question I’m always asked is, ‘shouldn’t gold be going higher?’

After three weeks straight of intense selling trading sentiment is cautiously shifting towards the commodities market halting the slide and beginning to move upward.

For the first time since the Greek and French elections commodity prices began to trade in divergence, starting in the European session. Growth sensitive commodities such as crude oil prices continued to follow markets lower, while copper is ticking higher by 0.015. 

Risk off sentiment remains going into the weekend after a small bounce late in the European session as high yielding currencies face overwhelmingly oversold technicals in the near term.

The Japanese yen is on the move as traders look for safe haven assets from deteriorating conditions in Greece, Spain and the euro zone generally.

As many of my posts refer to Fibonacci levels, I thought I should take the time to explain how to use the Fibonacci sequence when trading. 

Euro zone headlines and fear of Greece’s exit has meant industrial metals have nearly wiped out 2012 gains after copper and the euro hit a four month low yesterday.

As U.S. consumers applaud lower gasoline prices, our gain is someone else’s pain. As with any trade, there are two sides: stock markets that depend on the price of crude oil are feeling the pinch as prices move lower. 

Overnight trading in copper has now been confirmed by the U.S. session as another leg down. Copper has broken below the 2012 sideways trading channel to fuel even more fear that the global economy is falling back into recession.