By Russell Glaser
Record commodity prices have been a sharp reminder of how uprisings in the Middle East are playing out in the commodity markets. Currently crude oil, gold, and silver all stand at their 2011 highs.
Violence continues in Libya with an all-out civil war being fought in the streets as rebel groups are confronted by Libyan security forces loyal to Col. Muammar el-Qaddafi. Reports of government forces using helicopters, and tanks backed by air support have raised the level of violence in the region. Rebel leaders have since confirmed their commitment to upholding the previous regime’s oil contractual obligations.
In Yemen, a reported 200,000 protestors demonstrated on Friday, requesting for President Saleh to resign.
In Saudi Arabia, a day of rage has been planned but the calls for protests have been met by sharp comments from government officials. Officially the government has banned all protests have said any attempts to gather and protest will be dispersed by security forces.
The instability of some of the largest oil producing nations has caused a spike in not only spot crude oil prices but also in gold and silver as well. These events appear to be prolonged and will continue to pressure commodity prices higher on the instability in the region.
Spot crude oil prices have spiked and have since moved above a key retracement level. Last week’s close was above the 61.8% Fibonacci retracement at $103.75 from the collapse in crude oil prices in 2008. As such, new targets for spot crude oil prices may be found at the $110 level and $122.
Gold continues to make new highs with the price action in February displaying a sharp rising trend that has eclipsed the recent consolidation pattern from late October to early February. Last week’s close above the previous all-time high of $1,431 hints at further gains for the commodity. Support comes in at $1,431 and $1,392, as well as the range between the mid February highs and the mid-December low between $1,367 and $1,360.
Earlier today spot silver pushed to a new all-time high above the $36 level and looks to continue to rise. A strong trading session on Friday led to the weekly candlestick closing as a shaved head, indicating momentum is to the upside. Any move lower in the commodity could fall to $34.30, with further support locate in a range between $31.60 and the January high of 31.20.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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