Late last week’s sharp decline in commodities prices may lead to increased buying interest this week. While a round of profit-taking had been expected to hit prices, especially if prices were not able to break above key resistance levels, prices sold off Friday for a reason that does not support such a downward move.

Thus, prices may be expected to spring back this week, as investors reverse last Friday’s selling. Prices will have to hold above key support levels to attract investor fund, but that should not be a problem.

Prices for gold, silver, and oil had been trending higher over the past several weeks, prior to the sell-off late last week. Last week’s bout of profit-taking also coincided with a strengthening U.S. dollar, further weighing on commodities.

While buying interest may be sparked this week, the market remains vulnerable to another sell-off. Fundamentals continue to support prices for gold, silver, and oil.

There has been increased optimism in financial markets related to the global economic outlook. An economic recovery is increasing demand for silver from fabricators while demand for oil is rising from consumers and industrial users.

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