Weekly Commodities Update: Before the Holiday
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As we come to come to the end of the week and month of August going into the Labor Day holiday weekend, we have seen choppy sideways trading all week. The trading was stuck between about 1,520 per oz and 1,555 for a high hit on Monday and then the price just chopped all the way back down to around 1,522 in late Friday trading. While the price initially was moving up due to pressure from the ongoing U.S./China Trade wars, there was a pause in the bullish run in prices as the trade tensions moderated throughout the week and we saw the price relax back to the Monday open. Friday brought a modest increase in the U.S. inflation numbers, however there was little movement in prices as would be generally expected with higher inflation data. This could be due to the big run-up over the month and the light trading due to pre-holiday trading. This week’s trading has succeeded in establishing higher resistance at $1,540 and a higher support level of $1,520. We will see if next week’s holiday shortened trading will break out of this range, mostly depending on what happens with the ongoing trade tensions and next week employment numbers coming out on Friday September 6th.
Silver extended its rally as it moved up nicely early in the week but has really chopped sideways since mid-week with the thawing of trade tension rhetoric and the potential for restarting trade negotiations with China. Overall the week was good for Silver investors, with prices opening on Monday below $17.50 and then hitting a high of $18.50 before retracing back a bit to around the $18.20 level in late Friday trading. If trade tensions continue to subside, we could see a pullback due to some profit taking at this point. Previous resistance was $17.50 which is now a solid support level.
U.S. Crude oil opened at $53.85 per barrel on Monday and moved up strongly Tuesday, Wednesday and Thursday $56.86 as inventories showed declines. However, on Friday the price trading sharply lower erasing most of the week’ price gains. Currently in late Friday trading the price is trading just below $55 per barrel, which will be an overall gain for the week heading into the Labor Day holiday. Overall with the trading range in August between a support of $52 and an upper range of $57 we are closing the week and month out right in the middle of that range. Next week Oil prices could be pushed higher as U.S refineries are getting ready for the Hurricane Dorian as it moved into Florida and the Gulf Coast region. This could push prices higher depending on what disruptions are encountered.
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