Gold, oil and other commodities prices rise on US election

Gold is surging as voters cast ballots in an extremely close U.S. presidential election. Gold prices for December delivery increased 2% Tuesday to finish at $1,715 per ounce. Other commodities were mostly higher, including oil prices which ended up 3.6%. Traders are waiting for the results of the hard-fought race between President Barack Obama and Republican Mitt Romney. Analysts say the outcome could determine the future course of Federal Reserve's economic stimulus measures, which have benefited commodities. Commodities also are being supported by a weaker dollar. Since commodities are priced in dollars, a weaker dollar makes them cheaper for traders who use other currencies like the euro.

- As painful as it was for gold investors and other net long gold traders to watch, last week's almost jump-off-the-cliff drop in Comex gold prices has been matched by this week's vertical climb. It's a refreshing change for one thing, and hopefully with the conclusion of the US elections, there would be somewhat more certainty in the market environment, both in the commodities futures exchanges as well as in the broader stock markets. Hopefully, this doesn't turn out to be a 1-day wonder, though looking at the short-term chart one can already see some tapering off there.

Looking at the longer-term 1-year gold chart, one can see that the gold price has done almost nothing for close to a year, remaining range-bound within a $100 range above and below $1650. It would take a decisive break above $1750 or even better, $1800 to prove once and for all that we're out of this frustratingly range-bound consolidation.

Given the positive 50/200-dma upside crossover, it looks like there may be a better than even chance of that occurring. Add to that the bounce off oversold conditions, and if the momentum continues going in the same direction then a renewed assault on the old heights of $1900 and above would not seem too far-fetched a possibility.

And if there is to be a "one more thing", it is this : the longer term gold chart looks like a damped spring once again. The last time this phenomenon was mentioned here, gold prices were pivoting about the 1200 range and the time window was about 6 months. We've seen how prices have gone up since then.

This time round, the scale is apparently much larger (and so are the stakes as well). The pivot point is now about 1700 and the time window is 1.5 years, give or take a few weeks. Though history may not repeat exactly, there's still a good chance of it rhyming regardless, hence from a longer term chart we could see a possibility of beyond $2000 gold prices within the next couple of years or so.

Post a Comment:

Comments are closed for this entry.

« Singapore Bugis... | Main | Measuring the Progre... »

Most popular blog postings on lowem.log :

1. Singapore MRT rail network length to double by 2020
2. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
3. Live spot gold price quotes chart on COMEX
4. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
5. AVG Anti-Virus Free Edition 2011 direct download link
6. Real-time live gold and silver price quotes chart on COMEX
7. Singapore electric vehicles : Government agencies EMA and LTA to study EV introduction
8. Book review : Shut Down by William Flynn

Featured articles on lowem.log :

1. Book review : Shut Down by William Flynn
2. Singapore electric cars testing starts with 9 electric vehicles
3. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
4. 2010 Honda Civic Hybrid preliminary specifications released
5. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
6. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
7. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
8. Singapore : Nuclear power not ruled out