In the US trading session commodity prices continued to surge on US dollar weakness.
In light trading conditions both gold and silver rallied to new highs on the back of a surge in the value of the EUR/USD. Weakness in the greenback has fueled much of the recent commodity gains and in turn the EUR/USD climbed to a high of 1.4546, helping to push up commodities in step.
Spot gold rose to a new high at $1,505.65 to settle at $1,500. Spot silver climbed above the psychological $45 resistance level to $45.37 before closing at $45.06.
Crude oil prices surged following a larger than expected drawdown in US crude oil inventories. The weekly report showed a decline of -2.3M barrels on expectations of an increase of 0.7M.
Boosting risk sentiment was better than forecasted US existing home sales of 5.1M on expectations of 5.02M. As with European bourses, US equities put in a strong showing with the Dow Jones Industrials Average up 1.50%.
Tomorrow large data dump will take place throughout the day in both the European and US sessions. Highlights are the German Ifo survey, British retail sales numbers, and the US Philly Fed Manufacturing Index.
The risk on trade looks to continue into the holiday weekend as thinly staffed trading desks may allow for low liquidity and increased volatility as the holiday weekend approaches.
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Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
