Commodity Technical Outlook: COMEX

GOLD

Gold dropped lower overnight to open at 1203.50/1204.50. It briefly touched a high of 1208.00/1209.00 as the Euro strengthened against the Dollar. It then declined to a low of 1203.00/1204.00 following strong U.S. data that pointed to an increase in pending home sales and factory activity while global equities climbed to a six-year high. Quiet trading in the afternoon led the metal to close at 1204.00/1205.00. 

Gold is weaker today at 1204. The metal had been drifting higher the past week in a move that started at 1188 and ended Friday at 1218. We see key down side support at 1181 and topside resistance at 1222, which is the top of a bearish two-month channel. Big picture: the metal is closing out 2013 at the lower end of this year’s range of 1181 to 1795. The risk remains to the down side.

Gold settled down tracking Comex Gold which settled under $1,200 as a willingness to take on more risk and the prospect of a global recovery

Expectations that the U.S. economy will improve and the rest of the world’s growth will stabilise in 2014, have further undermined the case for holding bullion

Holdings on SPDR Gold Trust fell three tonnes on Friday to their lowest since Jan. 2009 at 801.2 tonnes.

Hedge funds and money managers cut their bullish bets in gold and silver in the week to Dec. 24, data from the CFTC showed on Monday. 

Technical Levels

	S1	S2	R1	R2
GOLD	1192	1181	1215	1226

Commodity Contract S3 S2 S1 R1 R2 R3

SILVER

Silver followed gold lower overnight to open at 19.59/19.64. It touched a low of 19.55/19.60 shortly after the open and then climbed to a high of 19.74/19.79 before closing the session at 19.61/19.66.

Silver is lower today at 19.66. Silver had been moving higher in recent trading from 19.15 to 20.19. The price action of the past month has been overall sideways with key levels seen at 18.91 and 20.47. Silver has had a rough 12 months falling from January high of 32.46 to July low of 18.26.

The Gold Silver ratio has spiked higher today from 60.23 to 61.25. We see resistance at 61.86 from a declining trend line.

Silver down after investors shrugged off soft U.S. housing figures and sold on concerns years of support from the Federal Reserve

Some market participants believe the Fed will likely reduce its bond purchases by USD10 billion in each of its next seven meetings

Holdings at ishares silver trust dropped by 50.90 tonnes to 9958.64 tonnes from 10009.54 tonnes.

Volumes remained light with year-end positioning and profit-taking driving flows. 

Technical Levels

	S1	S2	R1	R2
SILVER	19.32	19.03	20.04	20.47

Commodity Contract S3 S2 S1 R1 R2 R3

COPPER

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.389 a pound during European morning trade, up 0.1%. Comex copper prices traded in a range between USD3.372 a pound and USD3.391 a pound.
The March contract settled 0.4% lower on Friday to end at USD3.385 a pound. Copper prices were likely to find support at USD3.368 a pound, the low from December 26 and resistance at USD3.431 a pound, the high from December 24 and the strongest level since April 12.
Volumes were expected to remain light on Monday, with year-end positioning and profit-taking driving flows.
Copper prices have been well-supported in recent weeks amid indications the U.S. economic recovery is deepening. The U.S. is second behind China in global copper demand.

Copper futures were little changed near last week’s four-month high in subdued trade on Monday, as market players looked ahead to U.S. pending home sales data later in the day to gauge the strength of the world’s largest economy.

Copper little changed as market players looked ahead to U.S. pending home sales data later in the day to gauge the strength of the world’s largest economy.

Copper prices have been well-supported in recent weeks amid indications the U.S. economic recovery is deepening.

Copper production in the January-to-November period increased 6.5 percent to roughly 5.3 million tonnes, the INE added.

Warehouse stock for Copper at LME was at 367450mt that is down by -3500mt.

Technical Levels

	S1	S2	R1	R2
COPPER	3.3720	3.3611	3.3928	3.4031

Commodity Contract S3 S2 S1 R1 R2 R3

CRUDE

On the New York Mercantile Exchange, Crude oil futures for February delivery traded at USD99.34 a barrel at time of writing rising 0.05%.

It earlier traded at a session high USD99.39 a barrel. Crude oil was likely to find support at USD99.06 and resistance at USD100.75.
US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.01% to trade at USD80.16.
Elsewhere on the ICE, Brent oil for February delivery rose 0.03% to trade at USD111.27 a barrel, with the spread between the Brent oil and Crude oil contracts standing at USD11.93 a barrel.

Crude oil futures were higher during the Asian session on Tuesday.

Crude oil settled down after disappointing U.S. home sales figures sparked concerns that the U.S. economy continues to battle potholes on its road to recovery.

Support seen as data showed that U.S. total fuel demand hit a 26-month high in October while a key Libyan oil export port remained shut.

Energy Information Administration showed. U.S. crude is set for an annual gain of 8% in 2013, after falling about 7 per cent in 2012.

“OPEC oil ministers who claimed that there would not be any surpluses on the crude oil markets next year.

Technical Levels

	S1	S2	R1	R2
CRUDE	98.80	98.32	100.09	100.90

Commodity Contract S3 S2 S1 R1 R2 R3

Global Economic Data

Date: 31/12/2013
TIME :IST	DATA	PRV	EXP	IMPACT
7.30P.M	S&P/CS Composite-20 HPI y/y	13.3%	13.4%	MEDIUM
8.15P.M	Chicago PMI	63.0	61.3	MEDIUM
8.30P.M	CB Consumer Confidence	70.4	76.5	STRONG

S&P/CS Composite-20 HPI y/y

Source	Standard & Poor's (latest release)
Measures	Change in the selling price of single-family homes in 20 metropolitan areas;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 60 days after the month ends;
Next Release	Jan 28, 2014
FF Notes	This is one of the few non-seasonally adjusted numbers reported on the calendar, as it's the primary calculation for this indicator;
Why Traders Care	It's a leading indicator of the housing industry's health because rising house prices attract investors and spur industry activity;
Acro Expand	Standard & Poor's (S&P), Case-Shiller (CS), House Price Index (HPI);
Source	Standard & Poor's (latest release)

Chicago PMI

Source	MNI (latest release)
Measures	Level of a diffusion index based on surveyed purchasing managers in the Chicago area;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, on the last business day of the current month;
Next Release	Jan 31, 2014
FF Notes	Data is given to MNI subscribers 3 minutes before the public release time listed on the calendar - early market reaction is usually a result of trades made by these subscribers. Above 50.0 indicates expansion, below indicates contraction;
Why Traders Care	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 around 200 purchasing managers in Chicago which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;
Also Called	Chicago Business Barometer;
Acro Expand	Purchasing Managers' Index (PMI);

CB Consumer Confidence

Source	The Conference Board Inc. (latest release)
Measures	Level of a composite index based on surveyed households;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, on the last Tuesday of the current month;
Next Release	Jan 28, 2014
Why Traders Care	Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity;
Derived Via	Survey of about 5,000 households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation;
Acro Expand	The Conference Board (CB);