European stock indices looked as if they were set for a firmer open first thing. However, the majors soon gave up early gains and have begun to drift lower, depressed by European car manufacturers. Meanwhile, crude oil is a touch firmer with WTI and Brent testing resistance around $54 and $57 respectively. Both contracts need to break and hold above these levels on a closing basis to have any hope of getting back up to $60. While output cuts are helping with this, rising US production appears to be keeping the bulls in check for now.
Gold and silver have built on their gains from Friday’s session with the former trading above resistance around $1,220. This is despite a decent recovery in the dollar following Friday’s sharp sell-off. At the end of last week the dollar slumped and US and European stock indices soared following the release of US Non-Farm Payrolls for January. These were much stronger than expected. However, an unexpected drop in Average Earnings has convinced investors that the Fed will hold off from hiking rates at next month’s meeting.
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