Comex Commodity Technical Outlook Reports: 17th Sept 2013

Global Economic Data

DATE : 17.09.13

TIME        DATA                                            PRV          EXP            IMPACT

6.00P.M    Core CPI m/m                                0.2%.2      0.1%       STRONG 6.30P.M    TIC Long-Term Purchases            -66.9B      -45.3B      MEDIUM 7.30P.M    NAHB Housing Market Index        59             59          MEDIUM

 GOLD
Gold jumped higher overnight but quickly retreated, opening at an intra-day low of 1307.00/1308.00 as news of the withdrawal of Lawrence Summers as a candidate for the Fed Chair pushed most assets higher. The metal reached a high of 1325.00/1326.00 and declined thereafter as international tension regarding events in Syria continue to subside, diminishing demand for safe haven assets. It traded within range to close at 1318.00/1319.00.
Gold concluded the day at 1318. The metal has so far held last week’s low of 1305 which is roughly 50% of the June-August up move. Price action remains weak with former pivot 1348 holding the topside and 1273 the next support.
Gold dropped with markets expecting the Federal Reserve to begin tapering its commodity-boosting monetary stimulus as soon as this month.
Traders now turned their attention to this week’s U.S. monetary policy decision on Wednesday.
Fed Chairman Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough. 

Technical Levels

SUPPORT 1 : 1298

SUPPORT 2 : 1288

RESISTANCE 1 : 1324   

RESISTANCE 2 : 1339

SILVER
Silver also opened at the intra-day low of 21.72/21.77. Prices touched a high of 22.14/22.19 and fell thereafter while stocks and bonds rallied on major markets as investors wagered that U.S. monetary policy would remain accommodative longer than previously expected. It traded within range before closing at 21.97/22.02.

Silver finished the day at 21.97. The 50% support likes at 21.67 with last week’s low next at 21.41. Price action is weak, so we expect sellers on any bounce toward 22.48 the old 38.2% Fibo. The Gold Silver ratio is firmer at 60.00. While the ratio holds above former pivot 59.51 we would expect another test of 61.00.
Silver dropped as traders waited for guidance on when the U.S. FED will begin tapering its massive economic stimulus.
The consensus is that the Fed will reduce its bond purchases by $10 billion to $75 billion a month.
The withdrawal of Summers from the Fed race could suggest a more gradual approach to tightening monetary policy. 

Technical Levels

SUPPORT 1 : 21.36

SUPPORT 2 : 21.06

RESISTANCE 1 : 22.07

RESISTANCE 2 : 22.47                                                                                               

COPPER
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.215 a pound during European morning trade, Trading range of copper today between 3.260 to 3.190.

Copper futures rallied sharply as the U.S. dollar sank after former U.S. Treasury secretary Larry Summers withdrew himself from consideration to be the next Federal Reserve chairman. Summers’ withdrawal leaves Fed Vice Chairwoman Janet Yellen as the frontrunner for the job, who some analysts say may favor a slower reduction in U.S.
Copper dropped but still recovered from lows as investors’ appetite for risk improved on expectations of a diplomatic solution to the Syria crisis. Syrian crisis has receded further into the background, so that worry has moved away and has helped support copper. Larry Summers’ announcement to pull out of fight for Federal Reserve chair continued to impact the market.

Technical Levels

SUPPORT 1 : 3.1913           

SUPPORT 2 :  3.1756                 

RESISTANCE 1 : 3.2263                

RESISTANCE 2 : 3.2456                                                                                      

CRUDE
On the New York Mercantile Exchange, light, sweet crude futures for October delivery fell 0.65% to USD105.90 per barrel in Asian trading Tuesday. The October contract settled down 1.50% at USD106.59 per barrel on Monday.

The U.S. and Russia Syria one week to disclose its chemical weapons stockpiles, which will go undergo inspections by November. Russia intervened to broker a diplomatic solution after it became apparent the U.S. would entertain thoughts of a military strike against Syria for using chemical weapons against its own citizens.
Tepid economic data out of the U.S., the world’s largest oil consumer, also pressured crude. In U.S. economic news out Monday, a report from the Federal Reserve today showed U.S. industrial production rose 0.4% last month after a flat reading in July. The August increase was the biggest in six months. Housing and automobile production paced the gains.

Technical Levels

SUPPORT 1  : 104.94

SUPPORT 2  : 103.82

RESISTANCE 1  : 107.70            

RESISTANCE 2  : 108.82  

Core CPI m/m

Source	Bureau of Labor Statistics (latest release)
Measures	Change in the price of goods and services purchased by consumers, excluding food and energy;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 15 days after the month ends;
Next Release	Oct 16, 2013
FF Notes	Food and energy prices account for about a quarter of CPI, but they tend to be very volatile and distort the underlying trend. The FOMC usually pays the most attention to the Core data - so do traders;
Why Traders Care	Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate;
Also Called	CPI Ex Food and Energy, Underlying CPI;
Acro Expand	Consumer Price Index (CPI), Federal Open Market Committee (FOMC);

TIC Long-Term Purchases

Source	Department of the Treasury (latest release)
Measures	Difference in value between foreign long-term securities purchased by US citizens and US long-term securities purchased by foreigners during the reported period;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 45 days after the month ends;
Next Release	Oct 15, 2013
FF Notes	This data represents the balance of domestic and foreign investment - for example, if foreigners purchased $100 billion in US stocks and bonds, and the US purchased $30 billion in foreign stocks and bonds, the net reading would be 70.0B. The market impact tends to be significant but varies from month to month;
Why Traders Care	Demand for domestic securities and currency demand are directly linked because foreigners must buy the domestic currency to purchase the nation's securities;
Also Called	Net Long-term Securities Transactions;
Acro Expand	Treasury International Capital (TIC);

Industrial Production m/m

Source	NAHB (latest release)
Measures	Level of a diffusion index based on surveyed home builders;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, around the middle of the current month;
Next Release	Oct 16, 2013
FF Notes	Above 50 indicates a favorable outlook on home sales, below indicates a negative outlook;
Derived Via	Survey of about 900 home builders which asks respondents to rate the relative level of current and future single-family home sales;
Acro Expand	National Association of Home Builders (NAHB);