GOLD, SILVER, COPPER, CRUDE: Commodity Technical Outlook

SILVER

Silver opened at 21.75/21.80 and touched a low of 21.63/21.68 early on. Price was mostly flat in the session, with a peak at 21.89/21.94 and closing flat at 21.82/21.87.

Silver closed lower today at 21.82. The 61.8% retracement of the last leg higher is 20.86, and this should hold if the September down-leg is viewed as a correction of an uptrend. SuppoNew York Mercantile Exchangert is at the major low at 21.20. Resistance is at the most recent high at 23.42.

The gold-silver ratio broke higher today, but failed to close convincingly above resistance at 61.06 – it is currently at exactly that level. Still, this is a warning sign and opens up the risk of a retracement to 62.28, the 50% retracement of the August downtrend.

Silver recovered from lows but still seen under pressure amid ongoing speculation Fed will begin tapering its asset purchase program at its October policy meeting.

Data showed that manufacturing activity in the U.S. fell to a two-month low of 52.8 in September from a reading of 53.1 in August.

Meanwhile, in euro zone, data showed that manufacturing output in the single currency bloc was weaker than expected this month.
Technical Levels
Support-1: 21.48        Support-2: 21.17
Resistance-1: 21.99    Resistance-2: 22.19

GOLD

Precious metals continued to slide overnight. Gold opened this week at 1323.50/1324.50, before trading lower to bottom at 1317.50/1318.50 early in the day as mixed economic data gave concern to investors. Price reversed to reach a high of 1330.00/1331.00 by noon, as equities declined, and settled to close at 1326.75/1327.75.

Gold is closing lower today at 1326. While recent technicals have been bearish, there are a few reasons for the bulls to hang onto some hope. Firstly, the downward leg from August 28 to Sept 18 is consistent with a correction while 1277 holds, where 1277 is the 61.5% retracement of the previous uptrend from June to August. However a breach of support at 1292, the low from Sept 18, would be bearish. The second hope is that Daily RSI breached a strong resistance level in the low 60’s (which held during the Oct 2012 to June 2013 bear market) and “confirmed” the 1433 price high in gold by trading up to 71, which is more consistent with a bull market. However as we warned on Friday, the weekly chart still looks bearish.

Gold dropped as confusion over the outlook for U.S. monetary policy dragged on, with weak buying from China overnight adding to the softer tone.

Comments from James Bullard that the Fed could reverse last week’s surprise decision to maintain monetary easing at its next meeting weighed on prices

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.07 percent, or 0.6 tonnes, to 909.59 tonnes.
Technical Levels
Support-1: 1316        Support-2: 1305
Resistance-1: 1335    Resistance-2: 1342

COPPER

On the Comex division of the New YorkMercantile Exchange, copper futures for December delivery traded at USD3.271 a pound during European morning trade, Trading range of copper today between 3.311 to 3.240.

Copper settled down -0.42% as traders digested a series of manufacturing reports out of China and the euro zone in an attempt to gauge the strength of the global economy. Manufacturing numbers released earlier in the day showed that manufacturing output in the euro zone was weaker than expected this month.

Copper traders consider shifts in the HSBC PMI an indicator of China’s copper demand, as the industrial metal is widely used by the sector. Meanwhile, uncertainty over the direction of Fed policy weighed, following last week’s surprise decision to announce no reduction to its USD85 billion-a-month stimulus program.
Technical Levels
Support-1: 3.2908       Support-2: 3.2736
Resistance-1: 3.3168    Resistance-2: 3.3256

CRUDE

On the New York Mercantile Exchange, light, sweet crude futures for November delivery fell 0.27% to USD103.31 per barrel in Asian trading Tuesday. 

The November contract settled lower by 1.11% at USD103.59 per barrel on Monday. Oil has declined in sharply in recent weeks has tensions in Syria have ebbed. In another sign a more docile near-term environment in the usually volatile Middle East, Iran has reportedly freed 80 political prisoners before President Hassan Rohani’s upcoming trip to the United Nations. Iran is the third-largest OPEC producer. 

Over the weekend, it was reported that Libyan output is on the rise after protesters reopened access to facilities late last week sent oil prices falling on Monday. Libyan production is expected to return to about 700,000 barrels per day in the coming weeks, well above recent levels of 243,000 barrels.
Technical Levels
Support-1: 102.76       Support-2: 101.94
Resistance-1: 104.76    Resistance-2:105.94

Global Economic Data

TIME	DATA	PRV	EXP	IMPACT
6.30P.M	S&P/CS Composite-20 HPI y/y	12.10%	12.50%	MEDIUM
7.30P.M	CB Consumer Confidence	81.5	79.9	STRONG
10.30P.M	FOMC Member George Speaks			MEDIUM

S&P/CS Composite-20 HPI y/y

Source	Standard & Poor's (latest release)
Measures	Change in the selling price of single-family homes in 20 metropolitan areas;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 60 days after the month ends;
Next Release	Oct 31, 2013
FF Notes	This is one of the few non-seasonally adjusted numbers reported on the calendar, as it's the primary calculation for this indicator;
Why Traders Care	It's a leading indicator of the housing industry's health because rising house prices attract investors and spur industry activity;
Acro Expand	Standard & Poor's (S&P), Case-Shiller (CS), House Price Index (HPI);

CB Consumer Confidence

Source	The Conference Board Inc. (latest release)
Measures	Level of a composite index based on surveyed households;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, on the last Tuesday of the current month;
Next Release	Oct 29, 2013
Why Traders Care	Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity;
Derived Via	Survey of about 5,000 households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation;
Acro Expand	The Conference Board (CB);