Monday, 2 December 2013

Today's Commodity Technical Outlook (GOLD, SILVER, COPPER, CRUDE)

Technical Levels

GOLD 1238 1225 1258 1267
SILVER 19.70 19.42 20.15 20.32
COPPER 3.2045 3.1785 3.2555 3.2805
CRUDE 91.88 91.05 93.72 94.73
Commodity Contract S3 S2 S1 R1 R2 R3

Silver moved higher overnight to open at 20.03/20.08. It touched a high of 20.08/20.13 and then retreated to a low of 19.96/20.01 prior to concluding the day at 20.02/20.07.
Silver also closed lower this month, taking the metal from the 24.49 high in September to the close of 20.02 today. RSI is approaching oversold levels, currently at 39.54 with major support at 36 from previous lows - a breach would be very bearish. The price trend is also bearish, with support at the major low of 18.22. Resistance is at the 25.10 high from August. 
The gold-silver ratio is trading higher on the month at current 62.70. There is some resistance at 63.89, which is the 61.8% retracement of the move in the ratio from the 84.52 high in 2008 to the 30.51 low in 2011. Support is at 57.51, which is the 50% retracement. We are bullish the ratio.
Silver settled up on short covering after prices on month seen pressure as ongoing expectations for the Federal Reserve to soon begin tapering
Prices remained under pressure after upbeat U.S. employment and consumer confidence data released last week
U.S. data including nonfarm payrolls, third quarter GDP and manufacturing PMI will be released this week, giving more insight into the strength of the economy.
Gold moved higher overnight following the U.S. Thanksgiving holiday to open at 1253.00/1254.00. It touched a high of 1254.50/1255.50 on the back of a weak dollar and then declined to a low of 1250.25/1251.25 where it traded within range for most of the day due to the U.S. holiday. The metal closed the session at 1250.75/1251.75.
Gold closed lower this month at 1251, for the third consecutive month. RSI on the monthly chart is at 37.87, with some support at 34.00 from the major price low on June 28th, 2013. This gives gold some further room to fall before we reach support levels in RSI. The trend remains bearish, and we expect a test of the major low at 1180. Resistance is at the most recent significant high of 1433 from August.
Gold prices remained under pressure on signs that recovery in the U.S. economy could lead to the curbing of easy central bank money.
Prices in international gold has shed more than 5 percent in November and has lost around a quarter of its value so far this year.
Solid U.S. data over the past few weeks could bolster the case for the U.S. central bank curbing stimulus soon.
Copper settled up 0.38% as a fresh intraday record in U.S. equities and a weaker dollar bolstered investor appetite for the economically sensitive asset. Also helping copper, daily data showed stockpiles on the London Metal Exchange fell to 423,825 tonnes, their lowest point since mid-February this year. In addition, copper stocks held by the Shanghai Futures Exchange fell 2.1 percent from last Friday. Investors were also encouraged by the first fall in euro zone unemployment in almost four years, coupled with rising prices, which gave fresh momentum to an economic recovery in the region. In an indication that copper stocks leaving LME and SHFE warehouses have not all been consumed.
Weighing on the demand outlook, a poll showed manufacturing activity in top copper consumer China probably grew at a slower pace in November as demand weakened as Beijing shifts its focus to market-based reforms.
Copper gained as a fresh intraday record in U.S. equities and a weaker dollar bolstered investor appetite for the economically sensitive asset.
Chile, produced 507,694 tonnes of copper in October, a 6.5 percent increase from the year before
Copper stocks held by the Shanghai Futures Exchange fell 2.1 percent from last Friday.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD93.19 a  barrel, up 0.50%,
Last week, U.S. oil futures lost 2.23%. For November, NYMEX crude oil saw a 3.2% monthly loss, as ongoing concerns over rising U.S. inventories and increased production levels weighed.
The U.S. Energy Information Administration reported Wednesday that crude oil inventories last week rose by 3 million barrels to 391.4 million barrels, the most since June.
Domestic output rose to 8.02 million barrels a day, the highest level in almost 25 years.
Crude oil prices rose in early Asiantrade Monday as refiners took advantage of recent price dips.
Crude oil ended with gains as prolonged unrest in Libya kept supply worries to the fore.
Supply concerns just as winter demand for oil peaks will keep prices supported, but the outlook remains weak.
U.S. crude oil output last week exceeded 8 million bpd for the first time since January 1989, according to the U.S. EIA.
Global Economic Data
02.12.13 7.00P.M Fed Chairman Bernanke Speaks

02.12.13 8.30P.M ISM Manufacturing PMI 56.4 55.2 STRONG
Fed Chairman Bernanke Speaks
Description Due to speak at the National College Fed Challenge, in Washington DC;
Source Federal Reserve (latest release)
Speaker Federal Reserve Chairman Ben Bernanke;
Usual Effect More hawkish than expected = Good for currency;
FF Notes Fed Chairman Feb 2006 - Jan 2014. Fed Governor Feb 2002 - Jan 2020. Volatility is often experienced during his speeches as traders attempt to decipher interest rate clues;
Why Traders
As head of the central bank, which controls short term interest rates, he has more influence over the nation's currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy;
Acro Expand Federal Reserve (Fed);
ISM Manufacturing PMI
Source Institute for Supply Management (latest release)
Measures Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, on the first business day after the month ends;
Next Release Jan 2, 2014
FF Notes Above 50.0 indicates industry expansion, below indicates contraction;
Why Traders
It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy;
Derived Via Survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;
Also Called Manufacturing ISM Report On Business;
Acro Expand The Institute for Supply Management (ISM), Purchasing Managers' Index (PMI);


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