COMEX Outlook: Daily Technical Analysis

GOLD

Gold edged lower overnight to open at the session low of 1292.00/1293.00. 

The metal climbed after weaker-than-expected U.S. data showed disappointing consumer retail spending and lackluster growth in jobs. The metal touched a high of 1300.50/1301.50 before concluding the session at 1300.00/1301.00.

 Gold traded higher today, closing at 1301 and continuing its uptrend off the December 31st low. We are bullish gold so long as it holds support at the 1278 area. The next resistance is 1308, which is the 50% retracement of the August to December downtrend. RSI is confirming the move, making a new high dating back to August 2013. RSI is currently at 69.45, in bullish territory, and a sign that the uptrend has finally gained momentum.

Gold gained following the release of unexpectedly weak U.S. retail sales figures for January and separate report showing that initial jobless claims rose last week.

The U.S. Commerce Department said that retail sales fell by a seasonally adjusted 0.4% last month, disappointing expectations for a 0.3% increase.

SPDR gold trust holding gained by 7.50 tonnes i.e. 0.94% to 806.35 tonnes from 798.85 tonnes.

SILVER

Silver moved lower overnight to open at 20.20/20.25, which was also the low of the day. It followed gold to a high of 20.40/20.45 prior to concluding the session at 20.39/20.44.

Silver had a strong move higher today, closing at 20.44. The metal has moved from 19.01 to 20.44 in the past two weeks. RSI has finally broken through resistance and is currently at 62.32. These signs are encouraging; however, as we have had false breaks before in this long sideways consolidation, we will wait for a positive weekly close through 20.64 resistance to shift out of neutral.

The gold-silver ratio is trading lower at current 63.50, testing support at the same level, which is the 61.8% retracement of the last downtrend (in July-August 2013). There is strong support from the daily uptrend, which currently comes in at 61.82. Resistance is at the recent high of 65.37.

Silver gained as support seen from a sharply lower dollar and weaker equity markets.

Recent U.S. economic data, including two straight months of weak jobs growth, have raised questions over whether the world’s biggest economy can sustain growth

Core retail sales, which exclude automobile sales, were unchanged last month, compared to forecasts for a 0.1% increase.

COPPER

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded in a range between USD3.239 a pound and USD3.256 a pound.

Copper prices last traded at USD3.240 a pound during European morning hours, down 0.5%.

The March copper contract rallied to USD3.263 a pound on Wednesday, the most since January 29, before trimming gains to settle at USD3.256 a pound, up 1.28%.

Futures were likely to find support at USD3.202 a pound, the low from February 11 and resistance at USD3.263 a pound, the high from February 12.

Investors were looking ahead to U.S. retail sales data due later in the day, amid concerns that sales slumped in January after a 0.2% rise in December.

Recent weak jobs reports have raised concerns over whether the U.S. recovery has lost momentum since the end of last year.

Market players were also awaiting the release of inflation data out of China due on Friday to further gauge the strength of the world’s second largest economy.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Copper futures pulled back from a more than one-week high on Thursday, as investors looked ahead to key economic data out of the U.S. and China to gauge the strength of the world’s two-largest economies..

CRUDE

On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD100.17 a barrel during European morning trade, down 0.18%.

The March contract settled down 0.02% on Thursday to end at USD100.35 a barrel.

Oil futures were likely to find support at USD99.11 a barrel, the low from February 10 and resistance at USD101.38 a barrel, the high from February 12.

Oil prices remained under pressure after the U.S. Commerce Department on Thursday said that retail sales fell by a seasonally adjusted 0.4% last month, disappointing expectations for a 0.3% increase. Retail sales for December were revised down to a 0.1% decline from a previously reported increase of 0.2%.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.

Core retail sales, which exclude automobile sales, were unchanged last month, compared to forecasts for a 0.1% increase. Core sales in December were revised down to a gain of 0.3% from a previously reported increase of 0.7%.

Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.

A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week rose unexpectedly, underlining concerns over the strength of the labor market.

Crude oil futures edged lower during early European trading hours on Friday, as investors awaited the release of U.S. data later in the trading session, after disappointing economic reports on Thursday disappointed.

Technical Levels

	SUPPORT 1	SUPPORT 2	RESISTANCE 1	RESISTANCE 2
GOLD	1290	12681	1313	1322
SILVER	20.17	19.95	20.74	20.96
COPPER	3.2273	3.2046	3.2643	3.2786
CRUDE	99.61	98.87	100.87	101.39

Global Economic Data

DATE	TIME:IST	DATA	PRV	EXP	IMPACT
14.01.14	7.00P.M	Import Prices m/m	0.0%	-0.1%	MEDIUM
14.01.14	7.45P.M	Industrial Production m/m	0.3%	0.2%	MEDIUM
14.01.14	8.25P.M	Prelim UoM Consumer Sentiment	80.4	80.6	STRONG

Import Prices m/m

Source	Bureau of Labor Statistics (latest release)
Measures	Change in the price of imported goods and services purchased domestically;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 13 days after the month ends;
Next Release	Mar 13, 2014
FF Notes	This is the earliest government-released inflation data;
Why Traders Care	It contributes to inflation for businesses and consumers, especially those who rely heavily on imported goods and services;
Also Called	Import Price Index;
Source	Bureau of Labor Statistics (latest release)

Industrial Production m/m

Source	Federal Reserve (latest release)
Measures	Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 16 days after the month ends;
Next Release	Mar 17, 2014
Why Traders Care	It's a leading indicator of economic health - production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings;
Also Called	Factory Output;

Prelim UoM Consumer Sentiment

Source	University of Michigan (latest release)
Measures	Level of a composite index based on surveyed consumers;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, around the middle of the current month;
Next Release	Mar 14, 2014
FF Notes	There are 2 versions of this data released 14 days apart – Preliminary and Revised. The Preliminary release is the earlier and thus tends to have the most impact;
Why Traders Care	Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity;
Derived Via	Survey of about 500 consumers which asks respondents to rate the relative level of current and future economic conditions;
Also Called	Reuters/University of Michigan Consumer Sentiment;
Acro Expand	University of Michigan (UoM);