Our view from the outset has been that May would be a month of two halves for risky assets, with a strong start eventually giving way to renewed weakness. In the event, while we were correct to be relatively cautious on most commodities, the performance of the U.S. dollar has been as good as we had anticipated and our more bullish forecasts already been exceeded. As of now, there is an increased likelihood of a spike in gold prices as a result of the Federal Reserve winding down its quantitative easing measures.
April’s consumer price figures look set to reveal the first fall in CPI inflation since last September. What’s more, while core CPI inflation rose from 2.3% to 2.4% in March, this probably reflected this year’s earlier Easter. Accordingly, we expect overall CPI inflation to ease from 2.8% to 2.6%. The data suggests the British Pound could continue to head south. Our medium-term target is set at 1.5000, but for the next 24 hours, it would be wise to set your take profit at 1.5106
Stop loss 1.5209
Take profit 1.5106
Following the rally seen last week, this commodity has been falling since Monday. It is currently being traded around $95.70 a barrel. In a report, the American Petroleum Institute said that U.S. oil inventories rose by 532,000 barrels last week. The U.S. Energy Information Administration releases the more widely followed weekly inventories report later Wednesday. It will surely provide clearer direction. We expect the market bears to show themselves as we head back down towards $90.
Stop loss 96.50
Take profit 95.00
The turmoil in the Precious Metals sector continues, with the sell off pushing the price of Gold towards retesting the recent crash low. At the same time, Silver has actually bounced back. This strong technical correction took us from the lows of $20 up to $22.5. The impressive rally could be short-lived; however we strongly believe it may persist till June, or even July. At the moment, we advise our traders to enter long positions with a relatively close take profit set at $23.00
Stop Loss 22.00
Take profit 23.00