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.