9th Oct Commodity Technical Outlook: GOLD, SILVER, COPPER & CRUDE

Technical Levels

	SUPPORT 1	SUPPORT 2	RESISTANCE 1	RESISTANCE 2
GOLD	1316	1311	1329	1334
SILVER	22.19	21.94	22.60	23.02
COPPER	3.2760	3.2595	3.3150	3.3380
CRUDE	102.85	102.24	104.0	104.70

Commodity Contract S2 S1 R1 R2

GOLD

Gold was higher today as equities continued to slide while U.S. lawmakers remain deadlocked over the government shutdown and the debt ceiling debate. Gold opened at 1318.50/1319.50, touched a low of 1316.50/1317.50 before jumping to a session high of 1329.00/1330.00 around midmorning. The metal closed at 1324.50/1325.50.  

Gold closed higher today at 1324. Support is at the recent low of 1277 from October 2. Resistance is at the recent high of 1375 from September 19. We are currently neutral, but would view it as a positive development if gold holds key support at 1273.

Gold rose as U.S. government shutdown dragged on and a deadline to raise the national debt ceiling loomed.

The United States faces an Oct. 17 deadline to raise its $16.7 trillion debt limit.

The budget impasse that has shut down parts of the U.S. government entered its second week and still looked set to continue.

SILVER

Silver also traded higher on the day. After trading sideways overnight, silver opened the week at 21.89/21.94. Price bottomed at 21.88/21.93 early on, before advancing to a high of 22.45/22.50 as investors fled to safety. The metal closed the day near the high, at 22.35/22.40.

Silver closed higher today at 22.35, breaking through congestion in the low 22’s to reach a new 2 week high. Price action since the June 28th low at 18.23 is consistent with silver having formed a bottom; however, it is too early to make this conclusion. Resistance is at the recent high of 23.42 from September 19th. Support is at the recent low (from October 1) at 20.62.

The gold-silver ratio had a bearish move today, closing much lower at 59.28. The next support is 58.86, which is the 50% retracement of the November to August uptrend. We are bearish the ratio, targeting a full retracement to 57.09, the low from August 2013.

Silver fluctuated near highs as the U.S. moved closer to a deadline to raise the national debt ceiling or risk default.

Investors continued to monitor negotiations over a U.S. budget impasse that has kept the federal government shut down since October 1.

Traders will be looking ahead to Wednesday’s minutes of the Fed’s most recent policy-setting meeting for further clues.

COPPER

On the Comex division of the New YorkMercantile Exchange, copper futures for December delivery traded at USD3.311 a pound during European morning trade, up 0.45%. 

Copper prices held in a range between USD3.287 a pound, the daily low and a session high of USD3.314 a pound. The December contract settled 0.14% lower at USD3.296 a pound on Monday.
Copper prices were likely to find support at USD3.258 a pound, the low from October 4 and resistance at USD3.324 a pound, the high from October 3.

Copper futures edged higher on Tuesday, as investors speculated demand for the red metal will pick up as markets in mainland China re-opened following a week-long holiday.

Copper gained as investors speculated demand will pick up as markets in mainland China re-opened following a week-long holiday.

Chile will produce about 5.7 million tonnes of copper this year, an almost 5 percent increase on last year and a historic high.

The IMF trimmed its projections for global economic growth, citing deteriorating growth prospects in emerging markets.

CRUDE

On the New York Mercantile Exchange, light, sweet crude futures for November delivery rose 0.15% to USD103.65 per barrel in Asian trading Wednesday. The November contract settled higher by 0.45% at USD103.49 per barrel on Tuesday.

Analysts expected gasoline supplies to increase 1.3 million barrels and expected a drop of 1.9 million barrels in distillates. The U.S. Energy Information Administration is expected to release its weekly supply report despite the shutdown later today.
Oil may also be getting a lift on media reports that President Barrack Obama will nominate Federal Reserve Vice Chairwoman Janet Yellen to lead the U.S. central bank when Chairman Ben Bernanke retires early next year.

Oil futures traded modestly higher during Wednesday’s Asian session despite data from the American Petroleum Institute that showed an increase in inventories in the U.S. last week.

Crude rose as investors looked ahead to the release of key U.S. weekly supply data amid ongoing uncertainty over the U.S. government shutdown

The supply of North Sea crude that underpins the benchmark is set to reach a 2013 high in November.

Today crude oil inventories: EXP: 0.9M PREV: 5.5M. Actual is at 8.00PM

Global Economic Data

TIME	DATA	PRV	EXP	IMPACT
7.30 P.M	FOMC Member Evans Speaks
8.00 P.M	Crude Oil Inventories	5.5M	0.9M	MEDIUM
10.31 P.M	10-y Bond Auction			MEDIUM
11.30 P.M	FOMC Meeting Minutes			STRONG

Crude Oil Inventories

Source	Energy Information Administration (latest release)
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	Oct 16, 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;

10-y Bond Auction

Source	Treasury Direct (latest release)
Measures	Highest yield on 10-year bonds the government sold at auction, and the bid-to-cover ratio of the auction;
Usual Effect	No consistent effect - there are both risk and growth implications;
Frequency	Conducted monthly;
Next Release	Nov 7, 2013
FF Notes	Auction results are reported in an 'X.XX|X.X' format - the first number is the highest interest rate of the bonds sold, and the second number is the bid-to-cover ratio (number of bids made per bid accepted);
Why Traders Care	Yields are set by bond market investors, and therefore they can be used to decipher investors' outlook on future interest rates. The bid-to-cover ratio represents bond market liquidity and demand, which can be used to gauge investor confidence;
Also Called	Treasury Auction, Note Auction;
Source	Treasury Direct (latest release)

FOMC Meeting Minutes

Source	Federal Reserve (latest release)
Usual Effect	More hawkish than expected = Good for currency;
Frequency	Scheduled 8 times per year, 3 weeks after the Federal Funds Rate is announced;
Next Release	Nov 21, 2013
Why Traders Care	It's a detailed record of the FOMC's most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates;
Acro Expand	Federal Open Market Committee (FOMC);