Gold Silver Copper Crude: Commodity Technical Outlook

GOLD

Gold edged lower overnight to open at 1201.50/1202.50. It rose slightly to an intra-day high of 1203.50/1204.50 as strong U.S. data pointed to an increase in personal consumption. Thereafter the metal dropped, while global stock markets rose to record highs, to finally close at the session low of 1997.00/1998.00.

Gold closed lower today at 1198. Support is at the major low of 1180, with resistance at Thursday’s high around 1227. RSI is at 37.48 with support down at 19.74 from previous lows; thus gold can fall further before reaching 'oversold' levels. 

Gold dropped as players limited their exposure prior to year-end holidays in a market and facing further downside forecasts for 2014.

The impending tapering of the Federal Reserve’s stimulus measures also dimmed gold’s allure as a hedge against inflation.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 8.40 tonnes to 805.72 tonnes.

Technical Levels

	S1	S2	R1	R2
GOLD	1195	1190	1203	1209

Commodity Contract  S2 S1 R1 R2

SILVER

Silver remained largely unchanged overnight to open at 19.48/19.53. It rose marginally to a high of 19.51/19.56 before declining to a low of 19.38/19.43 and prior to concluding the day at 19.40/19.45.

Silver closed slightly higher today at 19.45. Support is at the major low of 18.90, with resistance at 19.93, last Thursday’s high. The trend remains bearish, with RSI at 42.29 and RSI support down at 22.42.

The gold-silver ratio is trading lower today at current 61.61. The ratio looks poised for near-term weakness, and may test its uptrend support which currently comes in at 60.63. Nevertheless, the ratio remains in an uptrend off the September low.

 Silver ended with losses as some investors continued to mull the Federal Reserve’s decision to reduce stimulus efforts.

Last week the Fed announced it would begin tapering its $85 billion in monthly bond purchases from next month.

U.S. consumer sentiment hit a 5-month high heading into the end of the year and spending notched up its strongest month since the summer.
Technical Levels

	S1	S2	R1	R2
SILVER	19.35	19.15	19.54	19.70

COPPER

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.306 a pound during European morning trade, down 0.05%. Comex copper prices traded in a range between USD3.299 a pound and USD3.315 a pound.
Copper prices were likely to find support at USD3.291 a pound, the low from December 20 and resistance at USD3.323 a pound, the high from December 19.
The March contract settled 0.38% higher on Friday to end at USD3.308 a pound.
The Commerce Department said Friday that the U.S. economy expanded by 4.1% in the third quarter, well above initial estimates for 3.6% growth, adding to signs that the economic recovery is gaining traction.

Copper futures fluctuated between modest gains and losses on Monday, as market sentiment remained mildly supported after Friday's upbeat U.S. economic growth data, while lingering concerns over higher borrowing costs in China weighed. 

Copper ended with losses as prices were not significantly boosted, as trading activity was dull before the Christmas.

Data out showed China’s imports of refined copper in November jumped 31.22 percent to 328,907 tonnes.

Technically market is under long liquidation as market has witnessed drop in open interest by -3.24% to settled at 12276.
Technical Levels

	S1	S2	R1	R2
COPPER	3.3453	3.3401	3.3545	3.3581

CRUDE

On the New York Mercantile Exchange, light sweet crude futures for delivery in February traded at USD99.11 a barrel during U.S. trading, down 0.21%.
The commodity hit a session low of USD98.70 and a high of USD99.32. The February contract settled up 0.28% at USD99.32 a barrel on Friday.
Oil futures were likely to find support at USD96.53 a barrel, the from low Dec. 16, and resistance at USD99.48 a  barrel, Thursday's high.

The Commerce Department reported on Friday that the U.S. gross domestic product expanded by 4.1% in the third quarter, well above consensus forecasts for 3.6% growth, which sent oil prices rising on hopes for faster economic recovery.
The Federal Reserve's Wednesday decision to trim its USD85 billion monthly bond-buying program by USD10 billion beginning in January also bolstered prices as well by further stoking expectations for more pronounced economic growth down the road.

Oil prices slid on Monday after investors locked in gains from Friday's robust economic growth data and sold the commodity for profits, especially after a widely-watched U.S. consumer sentiment report missed expectations.

Crude oil slipped as traders booked profits though refinery strikes in France and internal strife in producers Libya and South Sudan checked losses.

Escalating violence in South Sudan threatens the country’s 245,000 barrels per day (bpd) oil output.

China’s crude oil imports in November from Iran were 2.21 million tonnes, up 25.9 percent from the same month last year.
Technical Levels

	S1	S2	R1	R2
CRUDE	98.50	97.92	99.26	99.62

Global Economic Data

TIME	DATA	PRV	EXP	IMPACT
7.00P.M	Core Durable Goods Orders m/m	0.4%	0.9%	STRONG
7.00P.M	Durable Goods Orders m/m	-1.6%	1.7%	MEDIUM
8.30P.M	New Home Sales	444K	449K	STRONG

Core Durable Goods Orders m/m

Source	Census Bureau (latest release)
Measures	Change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 26 days after the month ends;
Next Release	Jan 28, 2014
FF Notes	Orders for aircraft are volatile and can severely distort the underlying trend. The Core data is therefore thought to be a better gauge of purchase order trends;
Why Traders Care	It's a leading indicator of production - rising purchase orders signal that manufacturers will increase activity as they work to fill the orders;
Also Called	Durable Goods Orders Ex Transportation;
Source	Census Bureau (latest release)

Durable Goods Orders m/m

Source	Census Bureau (latest release)
Measures	Change in the total value of new purchase orders placed with manufacturers for durable goods;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 26 days after the month ends;
Next Release	Jan 28, 2014
FF Notes	This data is usually revised via the Factory Orders report released about a week later. Durable goods are defined as hard products having a life expectancy of more than 3 years, such as automobiles, computers, appliances, and airplanes;
Why Traders Care	It's a leading indicator of production - rising purchase orders signal that manufacturers will increase activity as they work to fill the orders;
Source	Census Bureau (latest release)
Measures	Change in the total value of new purchase orders placed with manufacturers for durable goods;

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	Jan 27, 2014
FF Notes	While this is monthly data, it's reported in an annualized format (monthly figure x12);Technical Levels
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)