NOW that the Chinese inflation figures are out and the People’s Bank of China has once again refused to raise rates, fears that European commodity stocks might suffer on the back of slower Chinese growth have subsided slightly. This might offer an opportunity for the likes of gold miner Randgold Resources to bounce off the lower end of its upward trading range. WorldSpreads offers a 5,680p–5,695p spread on Randgold.
Another miner, silver producer Fresnillo, has been trending upwards all year and has nearly doubled in price since January, no doubt helped on by silver prices. With record output for silver and gold in the third quarter, and prices below their one month high, further strength can be expected. Capital Spreads quotes 1,558.2p–1,560.8p.
Barclays has fallen some 5.8 per cent in a week to 262p and continues to grind lower in a very well established downtrend channel. At 262p it is sitting more or less right in the middle of the current trading range so investors are advised to hold until 250p before buying or 276p before selling for a higher probability of a return. Spread Co offers a spread on Barclays of 262.05p–262.50p.
With Eurozone tensions still ongoing, it's not just Spanish government bonds that are suffering from threatened debt downgrades by the ratings agencies. Local stocks are also coming under significant pressure. The Spanish Ibex index has fallen below the 10,000 level as a result, although we remain some way above the lows for the year that were seen back in June. Thinner volumes towards the year end could well serve to exaggerate any volatility, so watch out. IG Index is currently pricing the Ibex at 9,958-9,963.
Gold has dipped back below the $1,400 level which in the past has provided a buying opportunity. With all eyes on tomorrow’s meeting of EU leaders, the focus will be on currency markets which will have a knock on effect for gold. If investors are happy with the resolution proposed then we could see a rise in the euro and at the same time strength in the price of gold. Capital Spreads quotes $1,391.0-$1,391.5 for gold.
It was a case of mission accomplished with our crude oil tip on Tuesday. US Crude had dropped to our target of $87.30 by yesterday morning. The dip though was followed by a rapid surge back up to the top of its downtrend channel at around $88.70 following better than expected industrial production numbers and a drop in crude inventories. This gives us another opportunity to short it, with the target now lowered to $86.80. Spread Co offers a spread on January US crude of $88.59-$88.63.