GOLD, SILVER, CRUDE, COPPER: Commodity Technical Outlook 18 sept 2013

Global Economic Data

TIME             DATA                                        PRV                EXP              IMPACT

6.00P.M        Building Permits                    0.95M.2           0.95M             STRONG 6.00P.M        Housing Starts                      0.90M             0.93M            MEDIUM 8.00P.M        Crude Oil Inventories           -0.2M              -1.2M             MEDIUM 11.30P.M      FOMC Economic Projections                                             STRONG 11.30P.M      FOMC Statement                                                                 STRONG

SILVER

Silver moved lower overnight, opening at 21.81/21.86. It rose marginally to 21.87/21.92 before retreating alongside gold to a low of 21.60/21.65. Quiet trade in the afternoon led to a close of 21.73/21.78.

Silver is closing at 21.78. It is interesting to note that Silver is also finding support at the 50% level near 21.67. A break here opening 20.87 the 61.8% Fibo.

The Gold-Silver Ratio has is closing at 60.20. While the ratio holds above former pivot 59.51, we see the risk of a move to 38.2% Fibo level 61.05.

Silver dropped as investors bet Fed will conclude a two-day meeting announcing plans to taper its USD85 billion monthly bond-buying program.

Losses were limited, however, as investors also bet the Federal Reserve will dismantle the stimulus program gradually.

U.S. Labor Department said the consumer price index rose 0.1% last month following a 0.2% rise in July.

Technical Levels

SUPPORT 1 : 21.33

SUPPORT 2 : 21.06

RESISTANCE 1 : 21.92

RESISTANCE 2 : 21.11

GOLD

Gold edged higher overnight, opening at 1319.25/1320.25 before drifting lower for most of the day ahead of tomorrow’s FOMC meeting as investors gage reaction to a possible tapering of the current bond-buying program. The metal breifly touched a high of 1320.25/1321.25 following a weak dollar and then declined to a low of 1305.75/1306.75. Thereafter, it rose slightly to close at 1309.00/1310.00.

Gold is closing at 1310 today, slightly lower than yesterday’s 1318. The price action of Gold has been weak for the past two weeks since the rejection at 1433. We seem to have found support near 1305 which is roughly the 50% of our June/July bounce. A break of this support opens 61.8% level at 1277. We see resistance now at 1337.

Gold fell on prospects that the U.S. Federal Reserve will announce a modest reduction in its bond-buying stimulus at its two-day meeting.

Markets expect the Fed’s will announce it will begin curbing its $85 billion monthly bond buying by just $10 billion.

India increased its import duty on gold jewellery to 15% from 10%, setting it higher than the duty on raw gold in a move to protect the domestic jewellery industry.

Technical Levels

SUPPORT 1 : 12985

SUPPORT 2 : 1277

RESISTANCE 1 : 1320 

RESISTANCE 2 : 1330

COPPER

On the Comex division of the New YorkMercantile Exchange, copper futures for December delivery traded at USD3.232 a pound during European morning trade, Trading range of copper today between 3.260 to 3.190.

Copper prices advanced on Monday as the US dollar came under pressure after former US Treasury Secretary Lawrence Summers bowed out of the race to succeed Ben Bernanke as the next chairman of the US central bank. Summers’ was perceived as being likely to unwind economic stimulus measures more aggressively than the other main contender for the post, current Fed Vice Chairwoman Janet Yellen. The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar. Investors remain skittish about the near-term outlook for metals prices, ahead of possible tapering commentary from the Fed.

Copper remained weak in cautious trade ahead of a Fed policy meeting at which central bank is widely expected to begin rolling back its monetary stimulus.

Expectations of higher supplies are also dragging on copper, which has fallen by about 11 percent so far this year.

Some investors were worried that the US Federal Reserve will scale back QE3, driving an exodus of capital from commodity market.

Technical Levels

SUPPORT 1 : 3.2185

SUPPORT 2 : 3.2090

RESISTANCE 1 : 3.2405

RESISTANCE 2 : 3.2530

CRUDE

On the New York Mercantile Exchange, light, sweet crude futures for October delivery inched down 0.05% to USD105.37 per barrel in Asian trading Wednesday. The October contract settled lower by 1.10% at USD105.42 per barrel on Tuesday.

Oil prices continued to fall after the U.S. and Russia agreed over the weekend on terms to dismantle Syria's chemical weapons cache, and while the U.S. has reiterated that it will act of Syria fails to comply, energy markets concluded that conflict is becoming much less likely.
Tepid data points did not help. In U.S. economic news out Tuesday, the U.S. Labor Department said the consumer price index rose 0.1% last month following a 0.2% rise in July. Excluding food and energy costs, core prices also rose just 0.1%. Year-over-year, prices are up 1.5%.

Crude dropped as a deal averting any imminent U.S. attack on Syria calmed fears of a Middle East oil supply disruption and some Libyan output resumed. Oil production in Libya is still far below its pre-war level of 1.6 million bpd, but officials say output from other oilfields could resume soon.

Today crude oil inventories: EXP: -1.2M PREV: -0.2M. Actual is at 8.00PM

Technical Levels

SUPPORT 1 : 104.76

SUPPORT 2 : 104.10

RESISTANCE 1 : 106.25

RESISTANCE 2 : 107.08

Building Permits

Source	Census Bureau (latest release)
Measures	Annualized number of new residential building permits issued during the previous month;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 17 days after the month ends;
Next Release	Oct 17, 2013
FF Notes	While this is monthly data, it's reported in an annualized format (monthly figure x12);
Why Traders Care	It's an excellent gauge of future construction activity because obtaining a permit is among the first steps in constructing a new building;
Also Called	Residential Building Permits;

Crude Oil Inventories

Source	Energy Information Administration
Measures	Change in the number of barrels of crude oil held in inventory by commercial firms during the past week;
Usual Effect	No consistent effect - there are both inflationary and growth implications;
Frequency	Released weekly, 4 days after the week ends;
Next Release	Sep 25, 2013
FF Notes	While this is a US indicator, it most affects the loonie due to Canada's sizable energy sector;
Why Traders Care	It influences the price of petroleum products which affects inflation, but also impacts growth as many industries rely on oil to produce goods;
Also Called	Crude Stocks, Crude Levels;
Acro Expand	Energy Information Administration (EIA)

FOMC Economic Projections

Source	Federal Reserve
Frequency	Scheduled 4 times per year;
Next Release	Dec 19, 2013
FF Notes	This report includes the FOMC's projection for inflation and economic growth over the next 2 years and, more importantly, a breakdown of individual FOMC member's interest rate forecasts. Source first released in Apr 2011;
Why Traders Care	It's the primary tool the Fed uses to communicate their economic and monetary projections to investors;
Acro Expand	Federal Open Market Committee (FOMC);

FOMC Statement

Source	Federal Reserve
Usual Effect	More hawkish than expected = Good for currency;
Frequency	Scheduled 8 times per year;
Next Release	Oct 30, 2013
FF Notes	The FOMC usually changes the statement slightly at each release. It's these changes that traders focus on.
Why Traders Care	It's the primary tool the FOMC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes;
Also Called	Interest Rate Statement, Fed Statement, Monetary Policy Statement;
Acro Expand	Federal Open Market Committee (FOMC);

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);

COMMODITY OUTLOOK: Gold, Silver, Copper, Crude

GOLD

Gold moved lower overnight on dollar strength, opening the day at  1317.75/1318.75. The metal reached a high of 1323.00/1324.00  before declining to 1307.75/1308.75 amidst the continued easing  of tensions over Syria and investor expectations of the Fed  rollback in response to signs of a strengthening U.S. economy.  Prices traded within this range and closed at 1308.50/1309.50.
Gold rebounded to end with gains on bargain hunting, but poor technical momentum, easing tensions with Syria.
The U.S. Fed may announce a cut in its $85 billion monthly bond purchases at the end of its two-day meeting on Sept. 18.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.66 percent to 911.12 tonnes.
Gold is closing lower today at 1309. The metal has fallen for 4  straight days breaking key supports along the way. The 1307 level  represents the 50% of our June to August up move. The price  action is bearish with next support level seen at 1277 the 61.8%  retracement and early August low. We would expect sellers on any  bounce to the 1348 level.

SILVER
Silver followed gold lower overnight, opening at 21.80/21.85. Prices touched a brief high of 21.93/21.98, before falling to 21.60/21.65 on the back of higher equities. The metal closed at 21.70/21.75.
Silver is closing lower at 21.75. By coincidence Silver has also retraced 50% of its June to August up move. The next support lies at 20.87 for the 61.8% with sellers now back at 22.48 (38.2% stop loss level triggered yesterday).

The Gold Silver ratio traded as high as 61.00 today, before closing back at current 60.10. We expect support now back at 59.51. It is interesting to note that 61.05 is the 38.2% retracement of our big down leg.
Silver gained on short covering after prices dropped after investors bet Fed next week will announce its intentions to begin tapering its monthly asset-purchasing program. Syria has agreed to hand over its chemical weapons cache to international control at Russia’s request.
Holdings at ishares silver trust dropped by 65.96 tonnes from 10563.70 tonnes to 10497.74 tonnes.

COPPER

 On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.200 a pound during European morning trade, Trading range of copper today between 3.260 to 3.190.
 Copper gained due to short covering after prices seen pressure on Friday as investors are worried that the Fed may announce during its policy meeting.
 Official data showed that U.S. retail sales rose 0.2% in August, disappointing expectations for a 0.4% rise. Summers said he would pull out of fight for Federal Reserve chair as any possible confirmation process would trigger an intense debate.


CRUDE
On the New York Mercantile Exchange, light, sweet crude futures for October delivery fell 0.80% to USD107.34 per barrel in Asian trading Monday. The October contract settled lower by 0.36% at USD108.21 per barrel on Friday.
Oil futures were likely to find support at USD106.44 a barrel, the low from September 10 and resistance at USD110.44 a barrel, the high from September 9. Last week, Nymex oil futures lost 2.45%, the biggest weekly decline since the week ended July 26.
On Saturday, U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed on a framework for Syria to destroy its chemical weapons stockpile by the middle of 2014. Under the agreement, Syrian President Bashar al-Assad will be required to declare his country’s stockpiles of chemical weapons by September 20.

Oil futures traded lower in the early part of Monday’s Asian session as traders in the region digested some slack U.S. data points that were published last Friday.

Technical Outlook For Top Commodities

GOLD

Gold dropped overnight as concerns over Syria receded. The metal opened at today’s high of 1338.00/1339.00, and continued to decline on better than expected US jobless claims, hitting a low of 1325.50/1326.50. Prices traded around this level, closing today at 1330.50/1331.50.  Gold has closed lower today at 1331, its largest decline since late June. Support at the 100 and 50 day MA’s has been broken (1356 and 1336, respectively), opening up the potential for a fall down to 1307, the 50% retracement level of the July-August rally, followed by the August 7th low at 1273.01. Resistance lies above 1350.
Gold futures traded slightly lower in the early part of Friday’s Asian session, extending losses from Thursday’s U.S. session, as traders dealt with lingering fears of Federal Reserve tapering.
Gold prices are likely to contract further in 2014, after tumbling for the first time in more than a decade this year with the case for bullion undone by confidence in a stabilising global economy. GFMS remained cautious on physical demand growth, saying that exceptional levels seen in the first half were unlikely to be replicated in the coming months as inventories in traditional buying stronghold China had been replenished.
 

SILVER

Silver traded lower overnight alongside gold, opening at 22.46/22.51. Prices touched a brief high 22.50/22.55, before plummeting further on the positive jobless data, dropping to a four week low, at 22.02/22.07. The metal closed at 22.12/22.17.
Silver was also lower, closing at 22.15. Several key support levels lie just below spot, with the 100 day MA at 21.78, the 50% retracement level of the June-August rally at 21.66, and the 50 day MA at 21.47.
The gold-silver ratio has rallied to the upper end of its recent range between 57.09 and 60.7, threatening a break of the latter, the August 20th high. Key levels to the upside consist of key retracement levels of the July-Aug decline, with the 38.2% level at 61.06 and the 50% level at 62.3.
Silver dropped after upbeat U.S. jobless claims data added to speculation the Federal Reserve will begin tapering its bond-buying program. Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken. The central bank is expected to kick-start stimulus withdrawal as soon as this month, possibly triggering new selling pressure.

COPPER

On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.225 a pound during European morning trade, down 1%. The December contract settled 0.17% lower at USD3.257 a pound on Wednesday.
Copper futures fell 1% to hit a one-week low on Thursday, as investors looked ahead to weekly data on U.S. jobless claims later in the session for indications on the strength of the economic recovery and the need for stimulus from the Federal Reserve.
Copper traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
The industrial metal came under pressure amid speculation the Fed will start tapering its bond-buying program at its upcoming policy meeting next week.

CRUDE

On the New York Mercantile Exchange, light, sweet crude futures for October delivery inched up 0.02% to USD18.62 per barrel in Asian trading Friday. The October contract settled up 0.97% at USD108.60 per barrel on Thursday.
Oil rose on concerns talks may hit snags and hike the chances of U.S.-led limited military strikes against Syria, which energy investors fear would engulf the broader oil-rich Middle East and threaten global supply.
However, OPEC member Libya has again the Middle East oil scenario because of dwindling supply. Libya has had supply issues for more than two years due to geopolitical strife and domestic attacks on oil assets.
Oil prices were mixed in Asian trade Friday as dealers monitor diplomatic efforts to make Syria give up its chemical weapons and avert a US-led military attack, analysts said.