COMMODITIES: Trend Structure in Gold Unchanged and Bullish

Short-term gains in WTI futures appear corrective - for now - and a bear threat remains present. Note that moving average studies are in a bear-mode position, highlighting a dominant downtrend. A stronger resumption of the bear leg would open key support and the bear trigger at $55.99, the Oct 20 low. Clearance of this level would resume the downtrend. Key short-term resistance to watch is $61.84, the Oct 24 high. Gold is in consolidation mode. The trend condition is unchanged, the set-up remains bullish. The bear phase between Oct 20 and 28 appears to have been a correction and note that the recovery since Oct 28 signals the end of that corrective cycle. Key support to watch is the 50-day EMA, at $4044.0. Clearance of this EMA would signal scope for a deeper retracement. Sights are on key resistance and the bull trigger at $4381.5, the Oct 20 high.

• WTI Crude down $0  or 0% at $58.27
• Natural Gas down $0.02 or -0.33% at $4.557
• Gold spot down $14.42 or -0.34% at $4193.27
• Copper up $7.7 or +1.45% at $539.75
• Silver up $0.24 or +0.4% at $60.8945
• Platinum down $20.84 or -1.23% at $1671.97

A bull cycle in Eurostoxx 50 futures remains intact and the contract is trading closer to its recent highs. Price has cleared the 20- and 50-day EMAs, signalling scope for a stronger recovery. Sights are on 5742.40 next (pierced), 76.4% of the Nov 13 - 21 bear leg. A clear breach of this price point would pave the way for an extension towards 5825.00, the Nov 13 high and a key resistance. First key support to watch lies at 5629.92, the 50-day EMA. A bull cycle in S&P E-Minis remains intact and price continues to trade above the 20- and 50- day EMAs. Note that recent gains signal the likely end of the corrective cycle between Oct 30 and Nov 21. A continuation higher would highlight potential for a move towards the key resistance and bull trigger at 6953.75, the Oct 30 high. Key support lies at 6525.00, the Nov 21 low. First support is at 6807.02, the 20-day EMA.

• Japan's NIKKEI closed lower by 52.3 pts or -0.1% at 50602.8 and the TOPIX ended 4.1 pts higher or +0.12% at 3389.02.
• Elsewhere, in China the SHANGHAI closed lower by 9.025 pts or -0.23% at 3900.496 and the HANG SENG ended 106.55 pts higher or +0.42% at 25540.78.
• Across Europe, Germany's DAX trades lower by 86.4 pts or -0.36% at 24076.12, FTSE 100 higher by 11.71 pts or +0.12% at 9653.42, CAC 40 down 20.87 pts or -0.26% at 8032.16 and Euro Stoxx 50 down 9.49 pts or -0.17% at 5709.02.
• Dow Jones mini up 9 pts or +0.02% at 47622, S&P 500 mini up 4.25 pts or +0.06% at 6852.5, NASDAQ mini up 6.75 pts or +0.03% at 25706.5.

• Chancellor Reeves is due to testify shortly ahead of the Treasury Select Committee regarding the Budget (public hearing begins at 10:00GMT). Link to the video here.
• Indeed, the official website for the TSC refers to it as Reeves being “grilled”.
• It should be an interesting hearing, given that the TSC was very forthright in their questioning of the OBR regarding leaks and amid allegations of misleading statements in the run-up Budget. There were also questions over the credibility of introducing the majority of the tax breaks around the likely time of an election (and we would add that the energy bill reduction is also temporary and will be reversed at the same time).
• Indeed, in our Budget Review we noted that although headroom was higher than expected at GBP21.7bln (market expectations had been for GBP15bln) we question its credibility. There is GBP8.6bln from reversing energy bill cuts, efficiency savings and HMRC closing the “tax gap” built into this number alone (with the latter two the increases to these measures since the Spring Statement). Without these the headroom would be GBP13.1bln. In addition, OBR forecasts still look optimistic to us.