Talking Points

• Crude Oil Sold as Prices Re-Couple with Risk Sentiment Trends
• Gold, Silver Under Pressure as Safe Haven Demand Boosts Dollar

WTI Crude Oil (NY Close): $97.41 // -1.41 // -1.43%

Crude oil appears to be falling back in line with overall risk sentiment trends after last week’sone-offdivergence, with prices under pressure amid reports thatlawmakers on the US budget “super-committee” areunlikely to strike a deal on deficit-reduction measures by the November 23 deadline, opening the door for action by the ratings agencies.

Continued Eurozone sovereign risk fears are compounding risk aversion as well as pressure on the WTI contract, with spreads between the yield on the benchmark German 10-year bond and equivalents from Spain, France and Italy pushing higher. S&P 500 stock index futures are sinking, pointing to more of the same as Wall Street comes online.

Turning to the chart setup, prices are pushing through rising trend line support set from the October 4 low after forming a Bearish Engulfing pattern below the $104/barrel figure. Initial support lines up at 94.56, with a break below that exposing 90.49.

Spot Gold (NY Close): $1723.95 // +2.17 // +0.13%

Gold prices are coming under fire in early European trade as risk aversion stokes safe-haven demand for the US Dollar, applying de-facto downward pressure on the yellow metal, with S&P 500 stock index futures pointing to more of the same ahead. Pricesare testing 23.6% Fibonacci extension support at 1711.13, a level reinforced by a rising trend line set from the September 26 low, with a break below that exposing the 38.2% Fib at 1654.44. Near-term resistance stands at 1746.08, the 14.6% extension.

Spot Silver (NY Close): $32.36 // +0.64 // +2.03%

As with gold, silver is coming under pressure amid a broad-based advance in the US Dollar as risk aversion stokes demand for the safe-haven currency. Prices are testing below the 23.6% Fibonacci extension at 31.39, with a break below that exposing the 38.2% level at 28.74. Near-term resistance lines up at the 33.00 figure.

---Written byIlya Spivak, Currency Strategist forDailyfx.com

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