Crude Oil Retreats To $103, Gold At A Crossroads Ahead of US Data

London (Apr 11)  Crude oil is retreating from its highest level in more than a month while the precious metals continue to tease at an upside breakout above key resistance. The undercurrent of risk-appetite is likely to hold some significance for the commodities space in the session ahead, which follows on from a steep selloff in US equities. A more material deterioration in investor risk sentiment would likely bode ill for the growth-sensitive commodities like oil and copper. This may arise on a disappointing US consumer confidence reading in the session ahead, while a raft of Chinese economic data will be on the radar for next week.

Crude Oil Pulls Back To $103.00

Broad-based risk aversion is weighing on WTI during the Asian session after the commodity traded at the highest level in more than 5 weeks during intraday trade yesterday. A fundamental spark for the declines is seeminly absent, however as noted previously, near-record levels for US equity benchmarks admist disappointing economic data has left general risk-appetite vulnerable to souring.

Gold Teasing Traders Near $1,320

The precious metals are struggling to push higher as the US Dollar stages a small recovery following several steep sessions of declines earlier in the week. A dovish lean from the FOMC in their March Meeting Minutes released on Thursday sent the reserve currency tumbling, putting it on track for the biggest weekly decline since October 2013.

Until we get the next leg lower for the USD, gold and silver may continue to struggle. Disappointing US economic data has weighed on the currency recently and thus a miss from the upcoming University of Michigan consumer confidence figures may invigorate the USD bears. It should also be noted that if the recent risk-aversion snowballs into a collapse in investor confidence, the greenback would likely strengthen based on safe-haven demand. This leaves gold and silver at a critical juncture in the session ahead.