Commodity Technical Outlook: 7th Nov

Posted: November 7, 2013 in Uncategorized
Technical Levels
 
SUPPORT 1
SUPPORT 2
RESISTANCE 1
RESISTANCE 2
GOLD
1310
1303
1323
1329
SILVER
21.56
21.36
22.02
22.27
COPPER
3.2133
3.1896
3.2693
3.3016
CRUDE
93.83
92.86
95.58
96.36
Commodity Contract S3 S2 S1 R1 R2 R3 
  SILVER
Silver followed gold higher overnight, opening at 21.90/21.95,  before trading to a high of 21.92/21.97. The metal retreated as  the dollar recovered, trading to a low of 21.72/21.77 prior to  closing at 21.75/21.80.
Silver is marginally higher at 21.80. The metal has traded  between 23.06 and 21.57 for the past week. The strong down  move from last Wednesday has bias to sell into any rally in the  metal toward 22.14 and 22.31 (38.2% and 50% levels). Key  down side level is 21.57.
The Gold Silver ratio at 60.45 is still close to resent 60.72 and  61.02 resistance levels. We had been bearish this ratio for the  past couple of months but the inability to break 58.85 has our  bias leaning to another up move. A break of 61.02 opens  October 1 high of 61.14.
Silver prices ended higher as a broadly weaker U.S. dollar boosted the appeal of the precious metal.
Fed official said U.S. central bank should scale back its asset purchases only when the economy shows clearer signs of improvement.
Investors also looked ahead to upcoming U.S. economic data and a policy meeting by the European Central Bank.

GOLD
Gold improved overnight on dollar weakness, opening the day  at 1319.75/1320.75, before quickly touching a high of  1320.25/1321.25. Profit taking as equities jumped took the metal to an intraday low of 1314.25/1315.25 prior to concluding  the session at 1317.50/1318.50.

Gold is firmer today closing at 1318. Another day of tight ranges  with down side support coming in at 1305 and resistance at  1330. The good news for Gold bulls is that $1300 seems to be  providing some type of psychological support. The market will  need to close back above 1330 before any fresh buying  emerges. While below 1330 our view is that risk is for another  test of the down side.
Gold advanced as the dollar fell on strengthening expectations that the U.S. Federal Reserve will extend its monetary stimulus.
Fed policymaker John Williams said the central bank should wait for stronger evidence of growth before trimming its bond-buying programme
SPDR Gold Trust, said its holdings rose 2.10 tonnes to 868.42 tonnes on Wednesday – the first increase since Oct. 22.

 COPPER

On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.271 a pound during European morning trade, up 0.4%.
Copper prices traded in a range between USD3.251 a pound, the session low and a daily high of USD3.275 a pound.
The December contract fell to USD3.243 a pound on Tuesday, the weakest level since October 25, before clawing back to settle at USD3.258 a pound, up 0.17%.
Copper prices were likely to find support at USD3.234 a pound, the low from October 25 and resistance at USD3.308 a pound, the high from November 4.
Copper futures bounced off a two-week low on Wednesday, as the U.S. dollar weakened amid ongoing uncertainty over the direction of U.S. monetary policy.
Copper settled down gave up it’s gains amid ongoing uncertainty over the direction of U.S. monetary policy.
European Commission cut its forecast for euro zone growth and said that unemployment in the region remains at unacceptably high levels.
Top US Fed officials call for the Fed to lower the unemployment threshold at which it will begin hiking interest rates.

CRUDE
On the New York Mercantile Exchange, light, sweet crude futures for December delivery rose 0.19% to USD94.98 per barrel in Asian trading Thursday. The December contract settled higher by 1.53% at USD94.80 per barrel on Wednesday, crude’s best showing in a month.

Crude got a boost Wednesday after the U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 1.58 million barrels in the week ended Nov. 1, compared to expectations for an increase of 1.63 million barrels. Total U.S. crude oil inventories stood at 385.4 million barrels.
Oil futures traded higher during Thursday’s Asian session, building on gains from Wednesday’s session that were driven by supply concerns.
Crude rallied after a bigger than forecast drop in gasoline inventories calmed concerns over rising supplies.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 1.57 million barrels.
Prices have been on a downward trend in recent weeks amid concerns the recent U.S. government shutdown created a drag on economic growth.
 
Global Economic Data
TIME DATA PRV EXP IMPACT
7.00 PM Advance GDP q/q 2.5% 2% STRONG
7.30 PM Unemployment Claims 340K 336K STRONG
7.00 PM Advance GDP Price Index q/q 0.6% 1.5% MEDIUM
Advance GDP q/q
FF Alert Release date delayed by 8 days due to the US government shutdown;
Source Bureau of Economic Analysis (latest release)
Measures Annualized change in the inflation-adjusted value of all goods and services produced by the economy;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released quarterly, about 30 days after the quarter ends;
FF Notes While this is q/q data, it’s reported in an annualized format (quarterly change x4). There are 3 versions of GDP released a month apart – Advance, Preliminary, and Final. The Advance release is the earliest and thus tends to have the most impact;
Why Traders
Care
It’s the broadest measure of economic activity and the primary gauge of the economy’s health;
Also Called GDP First Release, Estimated GDP;
Unemployment Claims
Source Department of Labor (latest release)
Measures The number of individuals who filed for unemployment insurance for the first time during the past week;
Usual Effect Actual < Forecast = Good for currency;
Frequency Released weekly, 5 days after the week ends;
Next Release Nov 14, 2013
FF Notes This is the nation’s earliest economic data. The market impact fluctuates from week to week – there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes;
Why Traders
Care
Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions;
Also Called Jobless Claims, Initial Claims;
Advance GDP Price Index q/q
FF Alert Release date delayed by 8 days due to the US government shutdown;
Source Bureau of Economic Analysis (latest release)
Measures Annualized change in the price of all goods and services included in GDP;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released quarterly, about 30 days after the quarter ends;
FF Notes While this is q/q data, it’s reported in an annualized format (quarterly change x4).
Why Traders
Care
It’s the broadest measure of inflation, encompassing all activities included in GDP, and is a primary instrument that the central bank uses to assess inflation;
Also Called GDP Deflator;
Acro Expand Gross Domestic Product (GDP);
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