[video] Quick Take: Oil Slumbers
NEW YORK ( TheStreet) -- TheStreet's Joe Deaux discusses what's been happening in the crude oil and gold markets with Jeffrey Grossman, president of BRG Brokerage, and Mike McGlone, research director at ETF Securities.
Grossman said the 5.2 million-barrel inventory increase was greater than expected and was weighing on crude oil prices.
He also said that crude oil looks like it could trade down towards $95 but was unlikely to go much lower in the near term. Grossman said traders might want to sell rallies, especially when oil gets near $98 a barrel.
He concluded that crude oil prices are simply reverting to where they were before tensions in the Middle East caused oil to breach $100 per barrel. The inventory data has proved that supply is not being disrupted, Grossman said.As for gold, McGlone noted that prices rose following the release of the nonfarm payroll report for September. He said that many investors at first worried that it was only short-covering that was driving prices higher. But he noted that the open interest in the gold futures market increased, rather than decreased, indicating that the rally wasn't fueled by short-covering. He added that the gold market is recovering nicely since its recent selloff. Also aiding the move in gold is the weakening of the dollar, he said. McGlone advised investors to watch gold on a weekly basis, rather than on a daily basis. He concluded that if the yellow metal can hold $1,300 an ounce through the week, it'll be a bullish sign going forward. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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