'Gold, Silver, Copper, Crude' Commodity technical analysis: 1st Nov

GOLD

The gold market ranged down today in a move the seemed to signal a breakdown in bullish sentiment.

The bear camp can pick from a number of themes with the breakneck rally in the Dollar seen as a primary bear force. However, gold also seems to be encountering selling pressure off a change in sentiment toward the US Fed as a lack of concern for the US economy in their recent statement and a 2 1/2 year high in some Chicago PMI data could be pulling back the tapering window from the estimates generally accepted over the last two weeks. A fresh negative for gold at the end of this week is a forecast from a Bank analyst calling for gold prices to average between $1,450 and $1,150 over the coming year and since most of that range is markedly below the current market that forecasts undermines gold sentiment somewhat. The question for the Friday trade is whether or not Chinese PMI data can alter sentiment or if the die is cast for more gold declines ahead.

SILVER

The silver market was under massive liquidation pressure Wednesday in the face of a 180 degree shift in physical commodity market sentiment. Like gold, silver saw outside pressure from currencies and perhaps most significantly from overt weakness in gold prices.

Silver declines on Wednesday were probably facilitated by reports of a 2013/2014 silver price forecast that generally projected silver to decline by as much $3.00 per ounce next year. While silver seems to be paying more attention to demand prospects than to demand, news that Mexican August silver production rose probably added into the bearish picture in silver over the last 24 hours of trade. The silver bulls have to hope that macro economic sentiment improves in China, that the Dollar reverses course and that the fear of US Fed tapering doesn't become more prominent in the headlines.

COPPER

Many traders feel that the coppermarket showed clear disappointment with the FOMC meeting statement yesterday, as December copper prices in the wake of the announcement fell back by 1 cent. However, copper finished yesterday with a clear divergence with the rest of the metals complex and comes into this morning's trading just below yesterday's highs.

Some in the market feel that copper was finding support from 40 straight days of daily LME copper stock declines, but that string was broken this morning with a minor rise of 125 tons. News that Antofagasta announced a dip in 3rd quarter production may provide some support, but that was probably offset by news that Glencore's copper production level beat market expectations.
The copper market might be presented with some fresh negative outside market forces directly ahead, both from the precious metals complex and from the currency markets. In addition to adverse currency market action, copper might also face some noted weakness in global equities as those markets are still seen as being off-balance in the wake of the FOMC meeting news yesterday.

CRUDE

December Crude Oil prices trended lower during the US morning hours and fell back toward the $96.00 level. 

A series of factors contributed to the decline, including weakness in outside markets, disappointing European economic data and ample US supply levels. The product markets were also lower on the session, with downside leadership coming from RBOB and a negative outside day reversal in December Heating Oil. The market managed to stabilize later in the session, with some support coming from a rebound in US equity markets and prospects for a decline in OPEC oil output last month.

Technical Levels

Commodity	Support 1	Support 2	Resistance 1	Resistance 2
Gold	1319	1310	1331	1345
Silver	21.65	21.45	22.05	22.3
Copper	3.292	3.278	3.32	3.34
Crude	95.95	95.38	97	97.8

Commodity Contract S3 S2 S1 R1 R2 R3

Global Economic Data

Time	Data	Prv	Exp	Impact
6:30 PM	Final Manufacturing PMI	51.1	51.1	Low
7:30 PM	ISM Manufacturing PMI	56.2	55.3	Strong
7:30 PM	ISM Manufacturing prices	56.5	55.1	Low

Final 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, on the first business day after the month ends;
Next Release	Dec 2, 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;

ISM Manufacturing PMI

Source	Institute for Supply Management (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, on the first business day after the month ends;
Next Release	Dec 2, 2013
FF Notes	Above 50.0 indicates industry expansion, below indicates contraction;
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 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;

ISM Manufacturing prices

Source	Institute for Supply Management (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, on the first business day after the month ends;
Next Release	Dec 2, 2013
FF Notes	This is a component of PMI but reported separately as an inflation gauge. Above 50.0 indicates rising prices, below indicates falling prices;
Why Traders Care	It's a leading indicator of consumer inflation - when businesses pay more for goods and services the higher costs are usually passed on to the consumer;
Derived Via	Survey of about 400 purchasing managers which asks respondents to rate the relative level of prices paid for goods and services;
Also Called	Manufacturing Prices Paid;