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);