COMEX Commodity Technical Analysis

GOLD
Gold edged higher overnight to open at 1229.00/1230.00. It  dipped shortly after open to a low of 1226.50/1227.50 and then  quickly surged to a two-week high of 1240.00/1241.00 while  global equities fell and the Dollar remained steady. As well, thin  volumes were expected following a snowstorm that hit the U.S.  Northeast as the metal traded within range for the rest of the  afternoon before closing under at 1238.50/1239.50.

Gold is closing the week at 1238. The weekly price action is quite  encouraging from a price perspective. Last week’s candle was a  “Inside week” or “Harami” which means “pregnant” in Japanese. This week Gold touched a fresh cycle low to 1182 but the close  above last week’s high of 1219 shows as an outside week reversal.  This is bullish. Focus now is on December high of 1267. Big picture,  the inability to break the 2013 low at 1180 is encouraging.
Gold prices gained rallying for a second consecutive day with a boost from renewed fund buying and equities’ weakness.
Fed Chairman said U.S. central bank is committed to highly accommodative policy even after deciding last month to trim its bond-buying stimulus.
Bullion prices dropped heavily last week as solid U.S. economic data underlined expectations the Federal Reserve will begin curbing stimulus. 

Technical Levels

	S1	S 2	R 1	R2
GOLD	1226	1214	1245	1251

Commodity Contract S2 S1 R1 R2

SILVER
Silver dipped marginally lower overnight to open at 20.08/20.13. It  dropped to a session low of 20.00/20.05 before lifting to a high of  20.22/20.27 on the back of gold and then finally concluding the  day at 20.20/20.25 on low volumes.
Silver is closing the week unchanged near 20.20. The fresh cycle  low to 18.85 can bounce higher is encouraging. Silver remains  below the December low of 20.47. A close above this level would  open a move to 21.23 the 38.2% of our 4 month down move off  25.09.

 The gold-silver ratio is higher this week at 61.45 compared to last  Friday’s 60.23 close. The ratio has been as high as 62.87 this week.
Silver rose as anticipation that two widely watched commodity indexes will drive more money to gold and silver buoyed prices of the precious metals
Markets are looking towards a slew of data this week, including U.S. nonfarm payrolls and trade numbers, to gauge the strength of economic recovery
Holdings at ishares silver trust dropped by 0.49% i.e. 49.15 tonnes to 9909.49 tonnes from 9958.64 tonnes. 

Technical Levels

	S1	S 2	R 1	R2
SILVER	19.96	19.62	20.30	20.64

Commodity Contract S2 S1 R1 R2

 COPPER
Copper settled down -0.88%  as expectations of higher supplies and concerns over Chinese growth weighed on the market. Copper has gained some support from a lack of readily available refined metal because of falling exchange stocks. But ample copper concentrate seen flowing into the market this year will result in swelling supplies.

A services gauge from China’s statistics bureau and logistics federation dropped to 54.6 in December. Inventories tracked by the Shanghai Futures Exchange reached 125,654 tons this week, the lowest in almost a year, according to data. Orders to remove copper from LME warehouses dropped the most since August to 235,100 tons. Copper stocks in LME-monitored warehouses are at the lowest level since January 2013. Cancelled warrants on the LME now account for about 65 percent of total stocks, so inventories on hand are actually less than the headline figure implies.
Silver rose as anticipation that two widely watched commodity indexes will drive more money to gold and silver buoyed prices of the precious metals
Markets are looking towards a slew of data this week, including U.S. nonfarm payrolls and trade numbers, to gauge the strength of economic recovery
Holdings at ishares silver trust dropped by 0.49% i.e. 49.15 tonnes to 9909.49 tonnes from 9958.64 tonnes. 

Technical Levels

	S1	S 2	R 1	R2
COPPER	3.3378	3.3206	3.3798	3.4046

Commodity Contract S2 S1 R1 R2

CRUDE
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in February traded at USD94.12 a barrel, up 0.16%.
Earlier on Friday, New York-traded oil futures hit a session low of USD93.38 a barrel. During last week, crude futures dropped 6%.
On Thursday, crude futures tumbled 3% to settle at USD95.44 a barrel on the Nymex. It was the sharpest one-day decline since early November 2012.
Libya’s National Oil Corporation said Thursday that exports could soon return to near normal levels after political protesters agreed to stop months of blockages. Libyan oil production has fallen sharply since July with protesters disrupting output at many of the country’s oilfields.

Expectations for increased exports from South Sudan also weighed.
In the U.S., the Energy Information Administration said Thursday that crude oil inventories fell by 7.01 million barrels in the previous week, far surpassing market expectations for a decline of 2.98 million barrels.
Crude oil futures rose during the Asian session on Monday as they recovered from last week’s fall, which was caused by rising production in the U.S. and an increase in international supplies
Crude oil dropped as the market braced for rising Libyan output, while soft Chinese service-sector data softened demand.
The U.S. EIA reported in its weekly report that U.S. crude oil inventories fell by 7.01 million barrels in the week last week
Expectations for increased exports from South Sudan also nudged prices lower. 

Technical Levels

	S1	S 2	R 1	R2
CRUDE	93.30	92.64	95.18	96.40

Commodity Contract S2 S1 R1 R2

  

Global Economic Data

TIME:IST	DATA	PRV	EXP	IMPACT
8.30P.M	ISM Non-Manufacturing PMI	53.9	54.6	STRONG
8.30P.M	Factory Orders m/m	-0.9%	1.8%	MEDIUM

ISM Non-Manufacturing PMI

Source	Institute for Supply Management (latest release)
Measures	Level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, on the third business day after the month ends;
Next Release	Feb 5, 2014
FF Notes	Above 50.0 indicates industry expansion, below indicates contraction. Source changed series from unadjusted to seasonally adjusted as of January 2001. Source changed series calculation formula as of Feb 2008;
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 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;

Factory Orders m/m

Source	Census Bureau (latest release)
Measures	Change in the total value of new purchase orders placed with manufacturers;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 35 days after the month ends;
Next Release	Feb 4, 2014
FF Notes	This report contains a revision of the Durable Goods Orders data released about a week earlier, and fresh data regarding non-durable goods;
Why Traders Care	It's a leading indicator of production - rising purchase orders signal that manufacturers will increase activity as they work to fill the orders;

FOMC Member Stein Speaks

Description	Due to deliver a speech titled "Banks as Patient Debt Investors" at the American Economic Association Conference, in Philadelphia;
Source	Federal Reserve (latest release)
Speaker	Federal Reserve Governor Jeremy Stein;
Usual Effect	More hawkish than expected = Good for currency;
FF Notes	FOMC voting member May 2012 - Jan 2018;
Why Traders Care	Federal Reserve FOMC members vote on where to set the nation's key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy;
Acro Expand	Federal Open Market Committee (FOMC);