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Oil

Oil is mustering up a nice rally as energy traders try to price in a China recovery that will unfold over the next few months. ​ WTI crude has strong support in the mid-$80s as the oil market still remains tight and now that a short-term peak with the dollar is in place. ​

Crude prices extended gains after the EIA crude oil inventory report showed exports surged to a record high and gasoline demand bounced back. ​ Crude production is anchored and that probably will remain the case unless the oil giants signal major investments in CAPEX. ​

The next big move in oil might come from oil earnings later this week that will tell us if we are going to see any investments in new wells. ​

Gold

Gold is ready to form its pre-Fed trading range. ​ A weaker dollar has been good news for bullion investors, but gains should be capped well ahead of the $1700 level. ​ Treasury yields have been steadily declining and that has helped make non-interest-bearing gold look more attractive.

The Bank of Canada's dovish surprise was good news for gold as it shows a major economy is already downshifting its tightening pace. ​ Expectations are growing for the Fed to shift to a half-point pace in December and if that seems more likely after next week, gold could have a nice breakout above the $1700 level. ​