Commodity Technical Analysis for Today

Posted: November 18, 2013 in Uncategorized

Technical Levels

SUPPORT 1 SUPPORT 2 RESISTANCE 1 RESISTANCE 2
GOLD 1281 1274 1292 1297
SILVER 20.57 20.43 20.96 21.11
COPPER 3.1485 3.1260 3.1890 3.2070
CRUDE 93.43 93.02 94.40 94.96
Commodity Contract S3 S2 S1 R1 R2 R3

SILVER

Silver moved lower overnight to open at 20.63/20.68, which was also the low of the day. Thereafter, it followed gold to a high of 20.79/20.84 prior to concluding the session at 20.73/20.78.
Silver closed lower for the 3rd week in a row, at 20.78. The close breached a support level of 20.85, which was the 61.8% retracement of the July-August uptrend. Intraweek, silver also made a new low around 20.44. The move opens up a retracement to the last significant low of 19.16 from August. ADX has declined sharply from a high in the 72’s to the current 26 level, indicating that bear momentum has faded substantially in this consolidation since June 2013. Like gold, silver may be forming a bottom; however, near term risk is to the downside.
Silver settled down as pressure seen since last Thursday after strong U.S. GDP and jobs growth data
Yellen told that while the economy is on the mend, inflation and unemployment rates have room to move closer to Fed comfort zones.
Holdings at ishares silver trust dropped by 50.93 tonnes to 10392.89 tonnes from 10443.82 tonnes.
GOLD
Gold edged lower overnight to open at 1282.75/1283.75. After dropping slightly to a low of 1282.25/1283.25, it rose to a high of 1289.75/1290.75 while the dollar weakened following a drop in U.S. industrial output and weaker than expected NY Fed manufacturing data. Thereafter, the metal traded within range to close marginally lower at 1287.75/1288.75.
Gold closed unchanged this week at 1288, forming a doji in the weekly candlestick chart. Support is at the most recent significant low of 1251, while resistance is at the most recent significant high of 1361. The RSI on the weekly chart is at 40, still within bear market territory, and the most recent signal from MACD is a sell. The bearish trend in place since the major high at 1921 remains strong, with an ADX of 40, which indicates a strong trend. However, gold’s inability to make a new low below 1251 is encouraging from a longer term perspective, and it is possible that the metal is forming a bottom, particularly given that it nearly achieved our technical objective of 1155 (when it traded to a low of 1180).
Gold settled flat underpinned by expectations that the nominee to lead the Fed, Janet Yellen, would continue easy monetary policy in that role
Yellen told Senate Committee the Fed’s economic stimulus would continue, prompting gold speculators to buy back their bearish bets.
China has purchased 798 tonnes of the precious metal so far this year, compared to India’s 715 tonnes – WGC
COPPER
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.174 a pound during European morning trade.
Comex copper prices declined 2.55% on the week.
Copper futures tumbled to the lowest level since August after a top-level Communist Party meeting disappointed investors who were expecting announcements of major economic reforms.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Copper ended with losses due to the outflow of money for risk aversion.
China’s production of refined copper may have been inflated by more than 15 percent this year.
Copper daily stocks at Shanghai exchange came down by 1801 tonnes
CRUDE
On the New York Mercantile Exchange, light sweet crude futures for delivery in December fell to USD94.38 a barrel, down 0.12%, trading in a range of USD94.36 – USD94.49. On Friday, the contract closed at USD93.84 a barrel.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, traded at 80.95 on Monday, up 0.10%.
Traders remained concerned about rising U.S. inventories.
The U.S. Energy Information Administration reported Thursday that crude oil inventories last week rose by 2.6 million barrels, far more than the 994,000 barrels predicted by analysts.
Total U.S. crude oil inventories stood at 388.1 million barrels as of last week, the highest since June.
New York crude oil futures eased in early Asian trade on Monday with the dollar index up slightly with the contract seen consolidating as large stockpiles in the United States weigh on the market.
Crude oil dropped on the reports that a senior U.S. official said a deal with Iran on its nuclear program was “quite possible”.
Sanctions against Iran because of its nuclear program have kept some 1 million barrels of oil off the global market.
The IEA said that while oil markets look well supplied in the short term, prices could rise in next few months due to a seasonal increase in demand.
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