Commodity Volatility Is Ready To Surge…
A number of very important news headlines and data points are hitting the wires this week, all of which have the potential to roil commodity markets.
First of all, the ongoing uncertainty surrounding Syria is already causing considerable volatility in gold, silver, and oil. The slightest whisper of Middle Eastern news sends these hard assets on a gut churning roller coaster ride.
As of this afternoon, a US Senate panel approved a limited US attack on Syria. Should President Obama follow through, we’ll likely see gold, silver, and oil trade much higher in coming weeks.
But believe it or not, Syria is just the tip of the iceberg…
A very important nonfarm payroll number is scheduled for this Friday at 8:30 am Eastern time. The consensus estimate for this month’s reading is job growth of 175,000.
If this widely watched data point comes in better than expected, it will send a strong message to investors that Federal Reserve Chairman Ben Bernanke is ready to start tapering US bond purchases.
While job growth is good for the economy, tapering will likely put a damper on commodity markets. So don’t be surprised to see oil, gold, and silver drop sharply if August jobs growth comes in strong.
Clearly, that’s all very important…
But this weekend’s Chinese economic data will likely steal the show.
China’s merchandise trade balance is set for release Saturday evening at 10 pm Eastern time.
As you may remember, last month’s blowout number sent gold and silver roaring higher. Year-over-year export growth for July came in at a shockingly good 5.1%, while imports surged a stunning 10.9%.
For this Saturday’s reading, the consensus analyst estimate is export/import growth of 5.1% and 11.3% respectively.
Should China trade growth grow more than expected, we’ll likely see an immediate bullish reaction in precious metals futures upon their opening Sunday night.
As you can see, there’s a lot to keep an eye on…
With so much important data and news pending, this is a not great week to be heavily positioned in gold, silver, and oil- in either direction. There are too many unknowns in the global marketplace for short-term traders to keep their risk profile in check.
As a result, it’s best to take a wait and see attitude with commodities this week.
Stay tuned to Commodity Trading Research for continued coverage of the hard asset markets!
Until Next Time,
Justin Bennett
Category: Commodity Trading
