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Gold consolidated in tight range below 4 hours 55 EMA last week. With 1418.5 minor resistance intact, near term outlook stays mildly bearish. Rebound from 1321.5 should have completed at 1487.2 already. Deeper fall should be seen to 1321.5 support and break will extend larger decline and should target 150% projection of 1923.7 to 1523.9 from 1798.1 at 1198.4 next, which is close to 1200 psychological level. On the upside, above 1418.5 minor resistance though will bring another recovery to extend the consolidation from 1321.5

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Gold Weekly Technical Outlook

Silver spiked lower to 20.25 last week but recovered since then. Initial bias is neutral for some consolidations. But outlook stays bearish as long as 24.795 resistance holds. Further decline is still in favor. Sustained break of 20 psychological level will target next key support level at 14.65.

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Silver Weekly Technical Outlook

Crude oil’s rally attempt was limited at 97.11 and reversed. Near term outlook stays neutral for the moment. On the upside, break of 97.17 will extend the rebound from 85.61. As noted before, price actions from 100.42 are a three wave consolidation pattern that’s completed at 85.61. Break of 98.23 will likely resume whole rally from 77.28 and target key resistance level at 114.83 next. Meanwhile below 92.13 will bring another decline to extend the sideway trading from 100.42.

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Crude Oil Weekly Technical Outlook

Natural gas’ recovery from 3.883 extended further last week but still, such recovery is looking corrective. While further rally might be seen, we’d be cautious on reversal below 4.444 resistance. Below 4.063 minor support will turn bias to the downside for 3.883. The correction from 4.444 might extend to 61.8% retracement of 3.125 to 4.444 at 3.629 before completion. But eventually, we’d still anticipate an upside breakout after the consolidative price actions complete.

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Natural Gas Weekly Technical Outlook

Risky assets were under pressure last week amid speculations that the Fed would taper QE measures sooner than expected. Fed Chairman Bernanke said during the week that labor market conditions “have shown some improvement recently” but still remain “weak overall”. Although he also stated that “monetary policy does not have the capacity to fully offset an economic headwind of this magnitude”, he also suggested that “a step down” in the pace of purchases “in the next few months” might be warranted if policymakers see sustainable improvements in the economy.

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Weekly Fundamentals – US Enters Driving Season, Gasoline Demand in Focus

UK sterling is back on a slide against major world currencies after this week’s retail sales volumes including fuel sank 1.3 percent, confounding economists forecasts for flat sales in the British economy.

Latest UK Sterling Rates

As of 08:10 GMT today, one pound UK sterling bought 1.16670 euro (0.12 percent lower) and against the US dollar the rate was $1.50950 (0.08 percent lower) and is heading close to its lowest level since early April.

Blame the Weather

The Office for National Statistics, which published the figures, said retailers had indicated that poor weather hindered their spring and summer ranges, with sales of barbecue food and garden furniture taking a hit.

Consumer spending, which accounts for 60pc of Britain’s gross domestic product, has been pressured in recent years by below-inflation wage growth, worries about the economy and government austerity measures.

“Much of the latest news on the UK economy has been relatively encouraging; but even allowing for the negative impact of ongoing cold weather and the fact that Easter occurred in March this year, April’s marked drop in retail sales provides a reminder that the economy is not yet out of the woods and still has a challenging job to develop sustained, clear growth.” said Howard Archer, chief economist at IHS Global Insight.

UK retail sales including fuel declined 1.3 percent from March, when they fell 0.6 percent according to the UK’s Office for National Statistics. The median forecast of 25 economists in a Bloomberg News survey was for a 0.1 percent increase. Food sales plunged 4.1 percent, the most since May 2011.

The ONS added that “there was little evidence of the bad weather having a significant effect on the services industry” during the first quarter. Added to the mix, strong oil and gas production from the North Sea also helped the economy to avoid a potential triple-dip recession.

The data was published one day after the International Monetary Fund (IMF) declared that Britain was “a long way” from a sustainable economic recovery. In a gloomy report, the IMF also called for the government to boost infrastructure spending in order to accelerate economic growth and offset state austerity.

The IMF repeated its call for British finance minister George Osborne to ease the coalition government’s austerity drive, despite his insistence last week that he would stick by his deficit slashing measures.

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UK sterling weakens against majors after British retail figures disappoint

The price of NYMEX WTI oil opens Friday’s trading session holding out near $94 a barrel after a brief dip yesterday near $92 but crude prices remain resilient amid record high US inventory levels for this time of the year.

Latest WTI Oil Price

US Light crude oil futures for July 2013 delivery was trading at $93.89 a barrel, 07:46 GMT this morning in electronic trading on the NYMEX. WTI crude sank as low as $92.21 on Thursday after weak manufacturing data from China triggered stock markets to slide lower.

US Inventory Levels

According to the US EIA (Energy Information Administration) US crude oil stockpiles dropped by 300,000 barrels this week to 394.6 million barrels, however oil supplies remain above the upper limit of the average range for this time of year. In recent months, crude oil stockpiles have risen to heights unseen in more than 80 years.

US Oil Demand

US crude oil demand inched up 0.3 percent in April from a year earlier, despite a sharp 3.9 percent drop in gasoline use, the US API (American Petroleum Institute) said in a report out yesterday.

“For the second month demand is up from a year ago. Consumer confidence has improved and distillate deliveries are up, but gasoline demand remains weak.” API chief economist John Felmy said in the data report.

US crude oil output climbed 15.9 percent from a year earlier to a 21 year April high of 7.264 million barrels a day. Crude oil production topped seven million barrels a day for a sixth straight month, as new technology such as hydraulic fracturing and horizontal drilling, unlocks oil deposits trapped in shale rock in several areas of the nation.

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WTI crude oil price holding near $94 amid record high US inventory levels

Financial tumbled after Bernanke’s comments raised speculations for Fed’s tapering of QE and disappointment in Chinese PMI data. The loss in US session was pared later in the day as initial jobless claims came in better than expected. Wall Street dropped with the DJIA and the S&P 500 indices losing -0.08% and -0.29% respectively.

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Financial Markets Slumped amid Worries about Fed’s Exit

In the precious metal complex, palladium has been the best performer so far this year. As of May 22, the Comex contract for palladium has added almost +7%, compared with a -4.7% drop in platinum and selloffs of gold and silver by -18.4% and -25.75 respectively. The relatively outstanding performance is due to the better fundamentals which would likely remain in deficit this year with strong autocatalytic demand and tight supply.

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Palladium to Remain the Best Performer in the Precious Metals Complex

Fed Chairman Bernanke’s testimony to the Joint Economic Committee of Congress was the reason for the rollercoaster trading in the US dollar. Bernanke’s comments were generally dovish and sent the USD lower but a reversal was seen when the Chairman stated that tapering might be considered if US economic indicators show improvements.

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USD’s Strength on Speculations of Tapering Fed’s QE Sent Risky Assets Lower