Gold, Silver,Copper, Crude: Comex Technical Report

SILVER

Silver advanced overnight to open at 19.25/19.30. It touched a low of 19.21/19.26 before climbing to a high of 19.62/19.67 and prior to concluding the session at 19.39/19.44. Free Trial

Silver closed higher today at 19.39. There is a base of support in the high 18’s/low 19’s, where we have traded on seven occasions since the beginning of December. There is also a strong downtrend in place on the daily chart, which currently comes in at 20.04. Silver has traded in a sideways range since early December, so we would need a breach of support at 18.83 or of resistance at 20.64 to get excited about the metal. 

The gold-silver ratio is trading close to unchanged at 64.94. It remains in a well-defined uptrend with support currently at 61.50. Resistance is at the major high of 67.56.

Silver gained after data showed that manufacturing activity in the U.S. deteriorated to the lowest level since June.

Caution over emerging markets, U.S. economy and Fed’s move to taper its stimulus program remain crucial to the metal’s moves

Holdings at ishares silver trust gained by 0.66% i.e. 65.84 tonnes to 10095.06 tonnes from 10029.22 tonnes.

Technical Levels

	S 1	S 2	R 1	R 2
SILVER	19.10	18.81	19.66	19.92

Commodity Contract S2 S1 R1 R2

GOLD

Gold moved higher overnight to open at 1247.00/1248.00. It touched a low of 1245.25/1246.25 before surging to a high of 1265.50/1266.50 as the dollar retreated while equity markets slipped following weaker-than-expected U.S. ISM data that showed a decline in manufacturing activity, which included a significant drop in new manufacturing orders, amidst continuing pressure on emerging markets. The metal then consolidated later in the afternoon to close the day at 1259.50/1260.50.

Gold closed higher today at 1260. Price action has been very lackluster, and the past two trading sessions have traded inside of Thursday’s big down-day. A nice clean break through the recent high of 1279, which is also a Fibonacci retracement level (38.2% of the August to December 2013 downtrend), would improve the outlook considerably and would shift our view out of neutral. We note the MACD is on the verge of triggering a sell signal.

Gold rose as prices were supported after a worse than expected U.S. manufacturing report weighed on the dollar and global equities.

ISM said its index of national factory activity fell to its lowest level since May 2013 at 51.3 last month, from a recently revised 56.5 in December.

U.S. manufacturing activity slowed sharply in January on the back of the biggest drop in new orders in 33 years.

Technical Levels

	S 1	S 2	R 1	R 2
GOLD	1245	1230	1270	1281

Commodity Contract S2 S1 R1 R2

COPPER

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery fell to a session low of USD3.184 a pound, the weakest since December 4, before trimming losses to trade at USD3.194 during European morning hours, down 0.1%.

The March copper contract settled down 0.91% on Friday to end at USD3.197 a pound. Copper futures were likely to find support at USD3.168 a pound, the low from December 2 and resistance at USD3.230 a pound, the high from January 31.

Copper prices have declined in each of the past eight sessions leading up to Monday, the longest losing streak since January 1996.

Data released earlier showed that China's official non-manufacturing PMI slipped to its lowest level since December 2008 in January, falling to 53.4 from 54.6 in December.

The deterioration in the services sector adds to declining manufacturing PMIs. Data released over the weekend showed that China’s official manufacturing PMI fell to a six-month low of 50.5 in January from 51.0 in December.

Last week, private sector data from HSBC confirmed a contraction in China’s manufacturing sector for the first time since July.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Technical Levels

	S 1	S 2	R 1	R 2
COPPER	3.1715	3.1595	3.1990	3.2145

Commodity Contract S2 S1 R1 R2

CRUDE

On Monday, the New York-traded oil futures hit a session low of USD96.54 a barrel and a high of USD96.73 a barrel. The March contract settled at USD96.65 a barrel.

Nymex oil futures were likely to find support at USD95.22 a barrel, the low from Jan. 27, and resistance at USD98.58 a barrel, Thursday's high.

Oil prices suffered after the Institute for Supply Management said its widely-watch manufacturing gauge fell to a seven-month low in January, as new orders slumped.

The ISM’s manufacturing purchasing managers’ index came in at 51.3 in January, down from 57.0 in December.

Analysts were expecting the index to inch down to 56.4 in January.

The report added new order growth fell at its fastest rate in 33 years, with the new orders index dropping to 51.2 from 64.4 in December. The employment index fell from 55.8 in December to 52.3, the weakest since June.

New York-traded crude oil prices fluctuated between small gains and losses in Asian trading on Tuesday after U.S. manufacturing gauges missed market expectations and painted a picture of a still-weak U.S. economy that will demand less fuel and energy going forward than once anticipated..

Technical Levels

	S 1	S 2	R 1	R 2
CRUDE	95.81	95.20	97.50	95.56

Commodity Contract S2 S1 R1 R2

Global Economic Data

TIME	DATA	PRV	EXP	IMPACT
8.30P.M	Factory Orders m/m	1.8%	-1.9%	MEDIUM
8.30P.M	IBD/TIPP Economic Optimism	45.2	46	LOW

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	Mar 6, 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;

IBD/TIPP Economic Optimism

Source	TIPP(latest release)
Measures	Level of a diffusion index based on surveyed consumers;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, around the middle of the current month;
Next Release	Mar 4, 2014
FF Notes	Above 50.0 indicates optimism, below indicates pessimism;
Derived Via	Survey of about 900 consumers which asks respondents to rate the relative level of economic conditions including six-month economic outlook, personal financial outlook, and confidence in federal economic policies;
Also Called	IBD/TIPP Consumer Confidence;