Technical Levels
| SUPPORT 1 | SUPPORT 2 | RESISTANCE 1 | RESISTANCE 2 | |
| GOLD | 1316 | 1307 | 1329.50 | 1330 |
| SILVER | 21.85 | 21.33 | 21.70 | 23.02 |
| COPPER | 3.2693 | 3.2421 | 3.3183 | 3.3401 |
| CRUDE | 102.01 | 100.99 | 103.89 | 104.75 |
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 gained as investors assessed the
impact of a lower dollar after politicians in Washington showed no
signs of making progress to resolve the U.S. budget standoff.
Investors are increasingly worried that
the political standoff in Washington will spark greater market
volatility as the October 17 deadline to raise the borrowing limit.
Any pick up in physical demand,
especially from China which returns from its week-long National Day
holiday on Tuesday, will also be in focus.
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 rose as uncertainty over the
U.S. government shutdown and the upcoming debt ceiling debate boosted
the safe-haven appeal.
Delays in U.S. economic data releases
fuelled speculation that the Federal Reserve will hold off on any
move to scale back its stimulus program.
The central bank is scheduled to meet
October 29-30 to review the economy and assess policy.
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, down 0.9%.
Copper prices fell by as much as 1.1%
earlier in the day to hit a session low of USD3.264 a pound. The
December contract settled 1% higher at USD3.301 a pound on
Friday.
Copper prices were likely to find support at USD3.249
a pound, the low from October 2 and resistance at USD3.324 a pound,
the high from October 3.
Copper futures fell sharply on Monday,
as comments made over the weekend by Republican House Speaker John
Boehner stoked fears that the political deadlock in Washington will
not be resolved by October 17, the date which the Treasury Department
has estimated the U.S. could risk an unprecedented default.
Copper settled flat as prices seen
under pressure amid concerns over the global economic outlook.
The World Bank lowered its outlook on
Chinese GDP growth to 7.5%, down from 8.3% and below the 7.5% the IMF
previously forecast.
Investors continued to monitor
negotiations over a U.S. budget impasse that has kept the federal
government shut down since October 1.
CRUDE
On the New York Mercantile Exchange,
light, sweet crude futures for November delivery inched up 0.05% to
USD103.08 per barrel in Asian trading Tuesday. The November contract
settled down 0.78% at USD103.03 per barrel Monday.
Tropical Storm Karen dissipated in the
Gulf of Mexico over the weekend, prompting energy companies to begin
reopening rigs and bring production back to normal, which softened
prices.
Although the U.S. dollar fell due to the ongoing
shutdown, riskier assets like stocks and oil were imperiled as
traders sough out safe-haven investments. An impasse among U.S.
lawmakers and the White House over terms needed to create a spending
package and reopen the government sent investors avoiding the dollar
on Monday.
Oil futures traded modestly higher
during Tuesday’s Asian session even as the first U.S. government
shutdown in 17 years lingered into a seventh day.
Crude oil dropped as oil production
resumed in the Gulf of Mexico after a tropical storm.
Tropical Storm Karen led producers to
shut in nearly two-thirds of oil output in the Gulf of Mexico last
week.
The Gulf of Mexico accounts for about
1.3 million barrels per day (bpd), nearly a fifth of U.S. oil output.
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