Monday, 30 December 2013

COMEX: Commodity Technical Outlook

Gold moved higher overnight to open at the session low of  1210.00/1211.00. The metal then climbed to a high of  1218.75/1219.75 on low volumes as the Euro appreciated against  the Dollar and major world equities rallied while U.S. government  bond yields rose to a two-and-a-half year high of 3.02 percent,  which is indicative of an improving economy and supports  expectations that the Fed will continue with tapering of its  monthly bond buying program. Quiet trading in the afternoon led  the metal to close at 1214.50/1215.50.
Gold closed slightly higher on the week at 1214; the metal has  been alternating between lower and higher weekly closes for the  past eight weeks. However, the down candles have been stronger  than the up ones, taking us from 1361 in early November to a low  of 1187. The major low of 1180 is likely to be tested. From an  Elliott Wave perspective, we feel we are in Wave C, the last wave  of the corrective 3-wave sequence off the 1921 high in September  2011. Possible targets for Wave C are 1155, which is the 61.8%  retracement of the 2008 to 2011 uptrend; or 1044, which is the  bottom of Wave 4 of this same uptrend. RSI is at 35.2, with  support just above 20, thus gold has further to go before it  reaches ‘oversold’ levels.
Gold settled flat as prices recovered from lows on the back of increased physical demand.
Expectations that the U.S. economy can stand on its own as monetary stimulus is withdrawn were buoyed by data showing a decrease in weekly jobless claims
SPDR gold trust holding dropped by 3.00 tonnes to 801.22 tonnes from 804.22 tonnes. 
Technical Levels

S1 S2 S3 S4
GOLD 1205 1200 1218 1221
Commodity Contract: S2 S1 R1 R2
Silver edged higher overnight to open at 19.88/19.93, which was  also the low of the day. It followed gold to a high of 20.09/20.14  prior to concluding the session at 20.00/20.05.
Silver closed higher this week at 20.05, trading inside of last  week’s range. Support is at 18.23 from the 2013 low. The trend  remains bearish, and a test of this level is likely. There is resistance  from the weekly downtrend off the August 2013 high, which  currently comes in at 21.30.
Silver ended with gains amid short covering after the dollar retreated further but remained on track for its annual loss as rallies in equities dented its appeal.
Gains were limited on sentiments that Fed’s plans to trim USD10 billion in monthly bond purchases in January will lead to further cuts to the stimulus program.
Holdings at ishares silver trust dropped by 50.90 tonnes to 9958.64 tonnes from 10009.54 tonnes.
Technical Levels

S1 S2 S3 S4
SILVER 19.70 19.55 20.04 20.27
Commodity Contract: S2 S1 R1 R2

Copper settled down -0.38% at 468.2 on profit booking after gaining due to tightening supplies and expectations that economic recovery in China will help boost demand. China’s economic growth is likely to come in at 7.6 percent this year, according to a cabinet report, just above the government’s target of 7.5 percent and slightly below last year’s 7.7 percent. Its industrial output is likely to grow by about 9.8 percent in 2013, the Ministry of Industry and Information Technology said.
Buying in China is expected to wind down during the Lunar New Year holidays in January. Also supporting copper prices has been a lack of readily available metal due to falling exchange stocks. The latest LME data showed copper stocks in exchange-registered warehouses dropped to their lowest since January at 370,950 tonnes. Still, ample copper concentrate seen flowing into the market next year will eventually feed into more stocks of refined copper, swelling supply and overhanging prices.
Copper dropped on profit booking after gaining due to tightening supplies and expectations that economic recovery in China will help boost demand.
State Reserves Bureau (SRB) is working on plans to buy about 300,000 tonnes of copper
Buying in China is expected to wind down during the Lunar New Year holidays in January.

Technical Levels

S1 S2 S3 S4
COPPER 3.4346 3.3993 3.4876 3.5053
Commodity Contract: S2 S1 R1 R2

 On the New York Mercantile Exchange, light sweet crude futures for delivery in February rose 0.77% on Friday to settle the week at USD100.32 a barrel by close of trade. U.S. oil prices rose to a session high of USD100.75 a barrel earlier, the strongest level since October 21.
Nymex oil futures were likely to find support at USD99.05 a barrel, the low from December 26 and resistance at USD101.22 a barrel, the high from October 21.
The February contract settled 0.33% higher on Thursday to end at USD99.55 a barrel. On the week, U.S. crude futures, also known as West Texas Intermediate or WTI, rose 0.99%.
The U.S. Energy Information Administration said in its weekly report released Friday that U.S. crude oil inventories fell by 4.7 million barrels in the week ended December 20, compared to expectations for a decline of 2.3 million barrels.
New York-traded crude oil futures ended the week at a nine-week high on Friday, climbing above the key USD100-a-barrel level after government data showed that U.S. oil supplies fell more-than-expected last week.
Crude gained driven by the fourth straight weekly decline in oil inventories and also drew support from civil unrest in Africa that has cut off supplies.
EIA said that U.S. Crude Oil Inventories fell to a seasonally adjusted annual rate of -4.731M, from -2.941M in the preceding month.
US crude stocks fall even as output hits 1988 high –EIA
Technical Levels

S1 S2 S3 S4
CRUDE 99.54 98.78 100.90 101.52
Commodity Contract: S2 S1 R1 R2
Global Economic Data
DATE 30.12.13
DATA Pending Home Sales m/m
PRV -0.6%
EXP 1.1%
Pending Home Sales m/m
Source National Association of Realtors (latest release)
Measures Change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 28 days after the month ends;
Next Release Jan 30, 2014
FF Notes This data is released about a week later than Existing Home Sales, but it's more forward-looking as a contract is signed several weeks before the home is counted as sold;
Why Traders
It's a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect. For example, renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction;
Also Called Pending Resales;
Source National Association of Realtors (latest release)


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