Technical Levels
Despite weaker equities, precious metals were lower today after yesterday’s advance. Gold opened lower at 1332.00/1333.00 and bottomed at 1329.50/1330.50 by midmorning. Price traded to a high of 1336.75/1337.75 later in the session, before closing at 1334.00/1335.00.
Gold
has managed to hold onto most of yesterdays strong gains at current
1334. Gold initially dipped lower but found support at former pivot
level 1329. Topside resistance is seen at 1344 with next move to 1364
marking the 61.8% retracement of the 1433 to 1253 down move. Overall,
we are bullish Gold looking for a move to 1433 while the metal holds
above 1300.
Gold ended with small gains but seen under pressure as a slight recovery in the dollar prompted some investors to cash in gains.
Weak U.S. jobs data cemented expectations for the Federal Reserve to keep its stimulus measures in place until next year.
Gold premiums in India hit $120 to London prices as the domestic market failed to get enough supply to meet strong festive demand.
SILVER
Silver was also lower, opening at 22.56/22.61. The metal touched a high of 22.70/22.75 early on, before easing off to bottom at 22.52/22.57. Silver closed the day at 22.58/22.63.
Silver
is down on the day at current 22.58. We see key support for Silver at
22.48 which was the reactionary high of our "Double Bottom" off of
20.60. We see a move into the $24s while the metal closes above 22.48.
Trailing stop losses would be triggered below $22.
Gold Silver ratio is closing higher at 59.08. We are bearish the ratio since it broke trend line support near 59.50. We see risk of a drop in the ratio toward August low 57.15 with only a close back above 59.59 shifting the view to neutral.
Silver dropped as investors sold contracts to lock in gains from a sharp rally which prices during the previous session.
Silver have been well-supported in recent sessions amid speculation Fed will maintain its stimulus program well into 2014 to support the economy.
Holdings at ishares silver trust gained by 74.92 tonnes to 10442.30 tonnes from 10367.38 tonnes.
COPPER
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.307 a pound during European morning trade, down 0.85%.
Copper prices fell to a session low of USD3.301 a pound earlier.
The December contract rose to USD3.355 a pound on Tuesday, the strongest level since September 20, before settling at USD3.335 a pound, up 0.97%.
Copper futures retreated from the previous session’s five-week high on Wednesday, as investors looked ahead to manufacturing data out of China, set for release on Thursday.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Copper fell as fears of tighter monetary policy in China outweighed speculation that tepid U.S. jobs data will deter Fed from tapering its stimulus this year.
While the prospect of extended U.S. monetary stimulus is supportive for metals, sluggish U.S. growth is doing little to improve copper’s demand outlook.
Copper prices hit the highest since Sept. 20 on Tuesday at $7,350 a tonne but have been in a broader $7,000-$7,420 band since early August.
CRUDE
On the New York Mercantile Exchange, light, sweet crude futures for December delivery rose 0.41% to USD97.26 per barrel in Asian trading Thursday. The December contract settled lower by 1.46% at USD96.86 per barrel on Wednesday.
Crude
sold-off Wednesday after the U.S. Energy Information Administration
said in its weekly report that U.S. crude oil inventories rose by 5.2
million barrels in the week ended Oct. 18, above expectations for an
increase of 3 million barrels, stoking concerns U.S. supply is too high
and demand not strong enough.
Total U.S. crude oil inventories stood at 379.8 million barrels, the highest level since June. The report also showed that total motor gasoline inventories declined by 1.8 million barrels, compared to expectations for a drop of 250,000 barrels.
Oil futures traded higher in the early part of Thursday’s Asian session as traders await another key data point out of China.
Crude oil fell after a government report showed that U.S. oil supplies rose more-than-expected in the week ended October 18.
The U.S. EIA said in its weekly report that U.S. crude oil inventories rose by 5.2 million barrels.
Over the past four weeks, inventories have risen by 22 million barrels, the biggest four-week build since April 2012 and the second largest since February 2009.
| SUPPORT 1 | SUPPORT 2 | RESISTANCE 1 | RESISTANCE 2 | |
| GOLD | 1323 | 1304 | 1352 | 1361 |
| SILVER | 22.24 | 21.69 | 23.08 | 23.38 |
| COPPER | 3.2401 | 3.2128 | 3.3146 | 3.3618 |
| CRUDE | 95.91 | 94.97 | 98.04 | 99.23 |
Commodity Contract S3 S2 S1 R1 R2 R3
GOLDDespite weaker equities, precious metals were lower today after yesterday’s advance. Gold opened lower at 1332.00/1333.00 and bottomed at 1329.50/1330.50 by midmorning. Price traded to a high of 1336.75/1337.75 later in the session, before closing at 1334.00/1335.00.
Gold
has managed to hold onto most of yesterdays strong gains at current
1334. Gold initially dipped lower but found support at former pivot
level 1329. Topside resistance is seen at 1344 with next move to 1364
marking the 61.8% retracement of the 1433 to 1253 down move. Overall,
we are bullish Gold looking for a move to 1433 while the metal holds
above 1300.Gold ended with small gains but seen under pressure as a slight recovery in the dollar prompted some investors to cash in gains.
Weak U.S. jobs data cemented expectations for the Federal Reserve to keep its stimulus measures in place until next year.
Gold premiums in India hit $120 to London prices as the domestic market failed to get enough supply to meet strong festive demand.
SILVER
Silver was also lower, opening at 22.56/22.61. The metal touched a high of 22.70/22.75 early on, before easing off to bottom at 22.52/22.57. Silver closed the day at 22.58/22.63.
Gold Silver ratio is closing higher at 59.08. We are bearish the ratio since it broke trend line support near 59.50. We see risk of a drop in the ratio toward August low 57.15 with only a close back above 59.59 shifting the view to neutral.
Silver dropped as investors sold contracts to lock in gains from a sharp rally which prices during the previous session.
Silver have been well-supported in recent sessions amid speculation Fed will maintain its stimulus program well into 2014 to support the economy.
Holdings at ishares silver trust gained by 74.92 tonnes to 10442.30 tonnes from 10367.38 tonnes.
COPPER
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.307 a pound during European morning trade, down 0.85%.
Copper prices fell to a session low of USD3.301 a pound earlier.The December contract rose to USD3.355 a pound on Tuesday, the strongest level since September 20, before settling at USD3.335 a pound, up 0.97%.
Copper futures retreated from the previous session’s five-week high on Wednesday, as investors looked ahead to manufacturing data out of China, set for release on Thursday.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Copper fell as fears of tighter monetary policy in China outweighed speculation that tepid U.S. jobs data will deter Fed from tapering its stimulus this year.
While the prospect of extended U.S. monetary stimulus is supportive for metals, sluggish U.S. growth is doing little to improve copper’s demand outlook.
Copper prices hit the highest since Sept. 20 on Tuesday at $7,350 a tonne but have been in a broader $7,000-$7,420 band since early August.
CRUDE
On the New York Mercantile Exchange, light, sweet crude futures for December delivery rose 0.41% to USD97.26 per barrel in Asian trading Thursday. The December contract settled lower by 1.46% at USD96.86 per barrel on Wednesday.
Crude
sold-off Wednesday after the U.S. Energy Information Administration
said in its weekly report that U.S. crude oil inventories rose by 5.2
million barrels in the week ended Oct. 18, above expectations for an
increase of 3 million barrels, stoking concerns U.S. supply is too high
and demand not strong enough. Total U.S. crude oil inventories stood at 379.8 million barrels, the highest level since June. The report also showed that total motor gasoline inventories declined by 1.8 million barrels, compared to expectations for a drop of 250,000 barrels.
Oil futures traded higher in the early part of Thursday’s Asian session as traders await another key data point out of China.
Crude oil fell after a government report showed that U.S. oil supplies rose more-than-expected in the week ended October 18.
The U.S. EIA said in its weekly report that U.S. crude oil inventories rose by 5.2 million barrels.
Over the past four weeks, inventories have risen by 22 million barrels, the biggest four-week build since April 2012 and the second largest since February 2009.
Global Economic Data
| TIME | DATA | PRV | EXP | IMPACT |
| 6.00 P.M | Trade Balance | -39.1B | -39.4B | STRONG |
| 6.30 P.M | Flash Manufacturing PMI | 52.8 | 52.8 | MEDIUM |
| 7.00 P.M | New Home Sales | 421K | 427K | STRONG |
| 8.00 P.M | Natural Gas Storage | 77B | 80B | LOW |
Trade Balance
| FF Alert | Release date delayed by 16 days due to the US government shutdown; |
| Source | Bureau of Economic Analysis (latest release) |
| Measures | Difference in value between imported and exported goods and services during the reported month; |
| Usual Effect | Actual > Forecast = Good for currency; |
| Frequency | Released monthly, about 35 days after the month ends; |
| Next Release | Nov 14, 2013 |
| FF Notes | A positive number indicates that more goods and services were exported than imported; |
| Why Traders Care |
Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers; |
Flash Manufacturing PMI
| Source | Markit (latest release) |
| Measures | Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry; |
| Usual Effect | Actual > Forecast = Good for currency; |
| Frequency | Released monthly, around 3 weeks into the current month; |
| Next Release | Nov 22, 2013 |
| FF Notes | Data is given to Thomson Reuters subscribers 2 minutes before the public release time listed on the calendar - early market reaction is usually a result of trades made by these subscribers. Above 50.0 indicates industry expansion, below indicates contraction. The 'Previous' listed is the 'Actual' from the Flash release and therefore the 'History' data will appear unconnected. There are 2 versions of this report released about a week apart – Flash and Final. The Flash release is the earliest and thus tends to have the most impact. Source first released in May 2012; |
| Why Traders Care |
It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy; |
| Derived Via | Survey of about 600 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories; |
New Home Sales
| Source | Census Bureau (latest release) |
| Measures | Annualized number of new single-family homes that were sold during the previous month; |
| Usual Effect | Actual > Forecast = Good for currency; |
| Frequency | Released monthly, about 25 days after the month ends; |
| Next Release | Nov 27, 2013 |
| FF Notes | While this is monthly data, it's reported in an annualized format (monthly figure x12); |
| Why Traders Care |
It's a leading indicator of economic health because the sale of a new home triggers a wide-reaching ripple effect. For example, furniture and appliances are purchased for the home, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction; |
| Also Called | New Residential Sales; |
| Source | Census Bureau (latest release) |
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