COMEX Report: Daily Technical Analysis View

Posted: February 18, 2014 in Uncategorized

SILVER
Silver advanced overnight – crossing the 200-day MA of $21 – to open at 21.07/21.12. It briefly touched a low of 21.05/21.10 before following gold to a high of 21.42/21.47. It concluded the session at 21.40/21.45.
Silver also closed higher this week, breaking through a downtrend that had been in place since August 2013 and closing at 21.45. RSI is now testing
resistance around the 52 level. These are encouraging signs that silver has formed a bottom. The next resistance is at the previous high of 23.09. Support is at the low of the recent range, at 18.83.
The gold-silver ratio is trading lower this week, currently at 61.50, and is testing support from the uptrend, which currently comes in at 61.03. We remain bullish the ratio as long as the uptrend holds. Resistance is at the recent high of 67.56.
Silver rose as weakness in rupee supported amid growing speculation the U.S. was moving closer to taking military action against Syria’s government.
An early end to stimulus could hurt precious metals by drawing investors away from non-interest-bearing assets.
Holdings at ishares silver trust gained by 44.99 tonnes to 10600.69 tonnes from 10555.70 tonnes

GOLD
Gold moved higher overnight, going past the 200-day MA of $1304, to open at 1317.00/1318.00. After retreating to a low of 1313.50/1314.50 early in the session the metal climbed to a high of 1321.00/1322.00 as the dollar depreciated in value following weak U.S. economic data showing a decline in industrial and manufacturing output. Range trading throughout the afternoon prior to concluding the session at 1318.50/1319.50.
Gold had a bullish breakout week, closing at 1319 and breaking through two major resistance levels in the 1301 to 1308 area. Both were 50% Fibonacci retracement levels. Momentum has turned higher, with RSI close to 54. We are bullish gold, targeting a full retracement back to the 1433 high from August 2013. In the meantime, gold faces resistance at 1361 then at 1433, the last two major highs. Gold climbed to the Life time High as Rupee dropped and political tension over Syria increased demand for the precious metal as a store of value. Western powers told the Syrian opposition to expect a strike against Syria President Bashar al-Assad’s forces within days SPDR Gold Trust, the world’s largest gold-backed ETF, said its holdings rose 0.10 percent, or 0.90 tonnes, to 921.03 tonnes.

COPPER
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery rose to a session high of USD3.306 a pound, the most since January 23.
Copper prices last traded at USD3.282 a pound during European morning hours, up 0.55%. The March copper contract ended Friday’s session 0.45% higher to settle at USD3.264 a pound.
Futures were likely to find support at USD3.244 a pound, the low from February 14 and resistance at USD3.338 a pound, the high from January 23.
Trade volumes were expected to remain light on Monday, with Comex floor trading remaining closed for the U.S. President’s Day holiday. All electronic trades placed will register on Tuesday, when the market resumes normal trading hours.
Data released over the weekend showed that Chinese aggregate financing, the broadest measure of credit, rose to a record-high of CNY2.58 trillion in January.
The report also showed that bank lending rose to a four-year high of CNY1.32 trillion last month, easing concerns over tightening liquidity levels.
Copper futures rose to a three-week high on Monday, amid speculation demand from top consumer China will increase after data pointed to an improvement in Chinese credit growth.

CRUDE
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in April traded at USD100.54 a barrel during Asian trading, up 0.40%.
On Monday the April contract traded in a range between USD100.52 a barrel and USD100.74 a barrel and ended the session at USD100.13 a barrel.
Nymex oil futures were likely to find support at USD99.45 a barrel, the low from February 14 and resistance at USD101.38 a barrel, the high from February 12.
Trade volumes remain lighted on Monday, with Nymex floor trading remaining closed for the U.S. President’s Day holiday. All electronic trades placed will register on Tuesday, when the market resumes normal trading hours.
Data released over the weekend showed that Chinese aggregate financing, the broadest measure of credit, rose to a record-high of CNY2.58 trillion in January.
The report also showed that bank lending rose to a four-year high of CNY1.32 trillion last month, easing concerns over tightening liquidity levels.
China is the world’s second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Nymex crude oil futures rose during Asian trading hours on Tuesday amid speculation that demand from China will increase after data pointed to an improvement in Chinese credit growth.

Technical Levels

SUPPORT 1 SUPPORT 2 RESISTANCE 1 RESISTANCE 2
GOLD 1306 1294 1325 1332
SILVER 20.74 20.07 21.79 22.16
COPPER 3.2493 3.2341 3.2748 3.2851
CRUDE 99.66 98.62 100.70 101.10

Commodity Contract S2 S1 R1 R2

Global Economic Data

TIME :IST DATA PRV EXP IMPACT
7.00P.M Empire State Manufacturing Index 12.5 9.9 MEDIUM
7.30P.M TIC Long-Term Purchases -29.3B 28.9B MEDIUM
8.30P.M NAHB Housing Market Index 56 56 MEDIUM

Empire State Manufacturing Index

Source Federal Reserve Bank of New York (latest release)
Measures Level of a diffusion index based on surveyed manufacturers in New York state;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, around the middle of the current month;
Next Release Mar 17, 2014
FF Notes Above 0.0 indicates improving conditions, below indicates worsening conditions;
Why Traders
Care
It’s a leading indicator of economic health – businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment;
Derived Via Survey of about 200 manufacturers in New York state which asks respondents to rate the relative level of general business conditions;
Also Called New York Manufacturing Index;

TIC Long-Term Purchases

Source Department of the Treasury (latest release)
Measures Difference in value between foreign long-term securities purchased by US citizens and US long-term securities purchased by foreigners during the reported period;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 45 days after the month ends;
Next Release Mar 17, 2014
FF Notes This data represents the balance of domestic and foreign investment – for example, if foreigners purchased $100 billion in US stocks and bonds, and the US purchased $30 billion in foreign stocks and bonds, the net reading would be 70.0B. The market impact tends to be significant but varies from month to month;
Why Traders
Care
Demand for domestic securities and currency demand are directly linked because foreigners must buy the domestic currency to purchase the nation’s securities;

NAHB Housing Market Index

Source NAHB (latest release)
Measures Level of a diffusion index based on surveyed home builders;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, around the middle of the current month;
Next Release Mar 17, 2014
FF Notes Above 50 indicates a favorable outlook on home sales, below indicates a negative outlook;
Derived Via Survey of about 900 home builders which asks respondents to rate the relative level of current and future single-family home sales;
Acro Expand National Association of Home Builders (NAHB);
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