Archive for January 14, 2014

SILVER
Silver edged lower overnight to open at 19.97/20.02, which was also the day’s low. It followed gold to a high of 20.41/20.46 before concluding the day at 20.36/20.41.
Silver closed higher today for the third session in a row, at 20.41, but has yet to break its sideways range. Resistance is at the range high at 20.51. Support is at the December 31 low of 18.83. 
The gold-silver ratio is trading lower for the third consecutive session, at current 61.43. The ratio remains in an uptrend since September 2013, but is poised to test that uptrend which currently comes in around 60.90. Generally speaking, a declining gold-silver ratio is bullish for the metals (i.e., silver should outperform gold in an uptrend). We are closely watching the uptrend line for a clear breach.
 Technical Levels

  S1 S2 R1 R2
SILVER 20.25 20.05 20.50 20.90CRUDE
Commodity Contract  S2 S1 R1 R2
 
GOLD
Gold moved marginally lower overnight to open at the session low of 1244.25/1245.25. Following surprisingly weaker-than-expected U.S. jobs data on Friday, the metal drew buying interest today against a weaker dollar to post a high of 1253.00/1254.00 amidst diminishing concerns that the Fed will speed up tapering of its bond-buying program. It concluded the day at 1251.50/1252.50.
Gold closed higher today at 1252, breaking up through the previous recent high at 1248. Positive momentum in gold now exceeds negative momentum on the daily chart, and this is good news for the metal. There is an uptrend in the daily chart providing support; which currently comes in at 1231. Gold has made a successive higher low and now a higher high – taking out the December high at 1268 would be a bullish signal.
 Technical Levels
  S1 S2 R1 R2
GOLD 1248 1232 1258 1267
Commodity Contract S2 S1 R1 R2
 
COPPER
Copper is sensitive to the economic growth outlook because of its widespread uses across industries. The U.S. is second behind China in global copper demand. On the Comexdivision of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.323 a pound during European morning trade, down 0.55%. Comex copper prices held in a range between USD3.322 a pound and USD3.367 a pound.
The March contract ended Friday’s session up 1.29% to settle at USD3.341 a pound. Copper prices were likely to find support at USD3.289 a pound, the low from January 10 and resistance at USD3.377 a pound, the high from January 8. The U.S. economy added just 74,000 jobs in December, the Labor Department said Friday, the smallest increase since January 2011 and well below expectations for 196,000 new jobs.Copper futures fell on Monday, after disappointing U.S. jobs data cast doubt on the strength of the economic recovery.
The disappointing data cooled expectations that the Federal Reserve would cut its stimulus program again this month. The central bank cited a stronger labor market in its decision to taper its asset purchase program by USD10 billion in December to USD75 billion-a-month.
Technical Levels
  S1 S2 R1 R2
COPPER 3.3270 3.3030 3.3550 3.3750
Commodity Contract  S2 S1 R1 R2
 
CRUDE
 On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March traded flat at USD92.03 a barrel up 0.03% during Asia morning trade. On Monday the New York-traded oil futures hit a session low of USD91.74 a barrel and a high of USD92.03 a barrel.
Talks among the U.S., Russia, China, Britain, Germany, France and Iran ended in agreement on a six-month deal that will limit advancements in Iran’s nuclear program in exchange for easing economic sanctions against Tehran starting Jan. 20.
In November, Iran pledged to eliminate its stocks of 20% enriched uranium within six months and limit the enrichment of uranium to 5%.
Trade sanctions slapped on Iran due to its alleged nuclear ambitions have taken out more than 1 million barrels of oil per day from the global market over the past two years.
Soft U.S. jobs numbers released Friday also pressured prices lower.
Crude oil prices rose slightly on Tuesday during Asian trading hours as markets digested the weekend reports that Iran has agreed on a multilateral plan that would curb Tehran’s nuclear ambitions in a deal that could allow it to resume exports and add to global supply.
Technical Levels
  S1 S2 R1 R2
CRUDE 91.30 91.00 92.00 92.50
Commodity Contract  S2 S1 R1 R2
Global Economic Data
TIME DATA PRV EXP IMPACT
7:00pm Core Retail Sales m/m 0.4% 0.4% STRONG
7:00pm Retail Sales m/m 0.7% 0.2% STRONG
7:00pm Import Prices m/m -0.6% 0.3% MEDIUM000
8:30pm Business Inventories m/m 0.7% 0.4% MEDIUM
11:15pm FOMC Member Plosser Speak     MEDIUM
11:50pm FOMC Member Fisher Speaks     MEDIUM
Core Retail Sales m/m
Source Census Bureau(latest release)
Measures Change in the total value of sales at the retail level, excluding automobiles;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 14 days after the month ends;
Next Release Feb 13, 2014
FF Notes Automobile sales account for about 20% of Retail Sales, but they tend to be very volatile and distort the underlying trend. The Core data is therefore thought to be a better gauge of spending trends;
Also Called Retail Sales Ex Autos;
Retail Sales m/m
Source Census Bureau(latest release)
Measures Change in the total value of sales at the retail level;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 14 days after the month ends;
Next Release Feb 13, 2014
FF Notes This is the earliest and broadest look at vital consumer spending data;
Why Traders
Care
It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity;
Also Called Advance Retail Sales;
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 Feb 14, 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;
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