Thursday, 19 December 2013

Gold Silver Copper Crude: Overnight Commodity Technical Outlook

Gold moved marginally higher overnight to open at  1232.00/1233.00. It touched a low of 1227.50/1228.50 as U.S.  government debt declined following strong U.S. housing data that  showed housing starts in November 2013 climbed to its highest  level in nearly six years. The metal then climbed to a high of  1237.50/1238.50 as the dollar steadied and consolidated later in  the afternoon to finally close at 1235.00/1236.00.
Gold closed higher today at 1235, continuing the sideways range  that has been in place for nearly a month. This has caused the ADX  (a measure of trend momentum) to deteriorate significantly, from  a recent high of 43.46 to a current level of 31.84. The bear trend  remains in place, but momentum has waned. We would need a  move below the recent 1210 low for the bear trend to accelerate.  If gold broke above the recent range high of 1268, we could see  some short-covering.
Gold prices marginally up but holds steady as market awaits Federal Reserve policy statement
The Fed trimmed the pace of its monthly asset purchases by $10 billion to $75 billion
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 4.20 tonnes to 812.62 tonnes on Wednesday. 
Technical Levels
S1 S2 R1 R2
GOLD 1220 1204 1248 1260
Commodity Contract S2 S1 R1 R2
Silver edged slightly higher overnight to open at 19.92/19.97. It  declined to a low of 19.87/19.92 and then rose to a session high of  20.10/20.15 before concluding the day at 20.04/20.09.Choppy trades followed post close after the Fed announced its  decision to begin tapering its monthly bond-buying program in  January 2014.
Silver also closed higher at 20.04; and has also been trading in a  sideways range. This has caused ADX to fall to 18.57, below  “trending” levels. If silver can hold its most recent low of 19.30,  and break above the recent 20.51 high, it will be an encouraging  signal for the bulls.
Silver settled up tracking firmness in base metals and crude oil prices ahead of the conclusion of the Fed’s policy meeting later in the day.
Fed chairman said the purchases would likely be cut at a “measured” pace through much of next year if job gains continued as expected
The U.S. Senate passed a two-year budget deal to ease automatic spending cuts and reduce the risk of a government shutdown. 
Technical Levels
S1 S2 R1 R2
SILVER 19.40 19.00 20.21 20.41
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.312 a pound during European morning trade, down 0.3%. Comex copper prices traded in a range between USD3.303 a pound and USD3.323 a pound.
Copper prices were likely to find near-term support at USD3.300 a pound, the low from December 16 and resistance at USD3.335 a pound, the high from December 17.
The March contract rallied to USD3.335 a pound on Tuesday, the highest since October 22, before turning lower to settle at USD3.321 a pound, down 0.24%.
Copper futures eased off the previous session’s seven-week high on Wednesday, as investors anxiously awaited the outcome of the final Federal Reserve policy meeting of 2013 later in the trading day.
Copper gained as most investors remained cautious before any news from the Fed’s policy meeting
In fresh quarterly forecasts, the central bank lowered its expectations for both inflation and unemployment over the next few years
The Census Bureau reported U.S. housing starts rose to 1.09 million units last month, from 890,000 in October beating consensus forecasts. 
Technical Levels
S1 S2 R1 R2
COPPER 3.3503 3.3396 3.3713 3.3816
On the New York Mercantile Exchange, light sweet crude futures for delivery in February traded at USD97.87 a barrel, down 0.18%, after hitting a session low overnight of USD97.31 and a high of USD98.26.
On Wednesday crude prices picked up on falling U.S. oil inventories. The U.S. Energy Information Administration reported in its weekly report that U.S. crude oil inventories fell by 2.9 million barrels in the week ended Dec. 13, beating expectations for a decline of 2.3 million barrels.
Total U.S. crude oil inventories stood at 372.3 million barrels as of last week, and the data sent prices gaining by stoking sentiments that demand for fuel and energy in the U.S. may be heavier than once anticipated
Oil prices fell in early morning trading in Asia on Thursday following the Federal Reserve announcement to scale back a monthly bond-buying program.
Crude oil prices rose buoyed by news that U.S. supplies fell more than expected last week.
The U.S. Energy Information Administration reported in its weekly report earlier that U.S. crude oil inventories fell by 2.9 million barrels
OPEC crude oil supply is forecast to expand at its fastest pace for 30-years in 2014 and that this will have significant implications for OPEC’s leverage over oil markets. 
Technical Levels
S1 S2 R1 R2
CRUDE 97.21 96.62 98.20 98.60
Global Economic Data
7.00P.M Unemployment Claims 366K 368K STRONG
8.30P.M Existing Home Sales 5.12M 5.04M STRONG
8.30P.M Philly Fed Manufacturing Index 6.5 10.3 STRONG
Unemployment Claims
Source Department of Labor (latest release)
Measures The number of individuals who filed for unemployment insurance for the first time during the past week;
Usual Effect Actual < Forecast = Good for currency;
Frequency Released weekly, 5 days after the week ends;
Next Release Dec 26, 2013
FF Notes This is the nation's earliest economic data. The market impact fluctuates from week to week - there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes;
Why Traders
Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy;
Also Called Jobless Claims, Initial Claims;
Source Department of Labor (latest release)
Existing Home Sales
Source National Association of Realtors (latest release)
Measures Annualized number of residential buildings that were sold during the previous month, excluding new construction;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 20 days after the month ends;
Next Release Jan 23, 2014
FF Notes While this is monthly data, it's reported in an annualized format (monthly figure x12). Existing homes make up the majority of total sales and therefore tend to have more impact than New Home Sales;
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 Home Resales;
Source National Association of Realtors (latest release)
Philly Fed Manufacturing Index
Source Federal Reserve Bank of Philadelphia (latest release)
Measures Level of a diffusion index based on surveyed manufacturers in Philadelphia;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, around the middle of the current month;
Next Release Jan 16, 2014
FF Notes Above 0.0 indicates improving conditions, below indicates worsening conditions;
Why Traders
It's a leading indicator of economic health - businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment;
Derived Via Survey of about 250 manufacturers in the Philadelphia Federal Reserve district which asks respondents to rate the relative level of general business conditions;
Also Called Philadelphia Fed Business Outlook Survey;


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