Here’s How Gold and Oil are Trading on the Debt Deal Progress

After the president’s sensitively-timed announcement last night (made just before markets opened in Japan) that Republican and Democratic leadership had agreed to a debt deal that would both raise the ceiling and make significant spending cuts, there was a significant response in the commodities market. Crude oil futures (NYSE:OIL) for September delivery rose 2.65% today, near $97.00 per barrel. Barclays (NYSE:BCS) analysts comment, “[prices may] find temporary relief in the agreement to raise the U.S. debt ceiling, although we suspect that this may prove temporary.” Note that the gains will be temporary.

Investing Insights: Are Support and Resistance Levels in Precious Metals Holding?

Gold (NYSE:GLD) futures continue to drop off this morning as the dollar rallies on news of the debt deal, and safe haven investors have less reason to panic. The yellow metal has lost more than $10 in December futures today in just over an hour of trading. A commodity (NYSE:RJI) analyst noted, “Despite the pullback in gold this morning there still remains some pessimism that the deal could fall at the last hurdle, but given the scale of gains posted in recent weeks the yellow metal is vulnerable to a deeper correction should the deal be given full approval.”