Comex Technical Analysis Report

Posted: February 24, 2014 in Uncategorized

GOLD
Gold moved higher overnight to open at 1324.00/1325.00. Shortly after open, it climbed to a high of 1326.00/1327.00 before dropping to a low of 1319.00/1320.00 as the dollar appreciated and global equities gained momentum following good corporate results despite U.S. data that pointed to a fall in existing home sales to its lowest level since Q3 2012. The metal recovered towards the end of the day to close near opening levels at 1323.00/1324.00.
Gold closed higher for the third week in a row, at 1324. The move from 1182 in December 2013 to fresh highs this week in the 1327 area is bullish. The move is confirmed by fresh highs in RSI, which has broken out of a sideways range and is currently at 54.81 on the weekly chart. Support is at 1301-1308 where we have Fibonacci convergence (1301 is the 50% retracement of the 2008 to 2011 uptrend. 1308 is the 50% retracement of the last downtrend from August to December 2013). Resistance is at the 1433 high from August 2013. We are bullish so long as gold trades above 1278-79.
SILVER
Silver retreated overnight to open at the session low of 21.60/21.65. Shortly after open, it posted a high of 21.76/21.81 before closing the day at 21.65/21.70.
Silver moved back higher today to the upper end of our one month range. The metal seems to have found support at the 23.6% Fibo at 21.28. Resistance is seen at 21.98, which is last week’s high and the 50% retracement level of the last down leg from 25.09 to 18.51. While the metal holds above 21.28 we see risk of another leg higher to the 61.8% retracement level at 22.70.
The gold-silver ratio remains heavy at current 60.63. The drop this month from 65.10 to 60.35 overhangs the market. Support is seen at 60.23 from the December 31st low. The 60.17 level represents the key 61.8% Fibo of our five-month up move from 57.12 to 65.10. Despite the technical support we see the risk of another leg lower to 59.00. Only a move back above 61.55 would shake the bearish bias.
Silver dropped as after investors continued to sell for profits, shrugging off a soft regional U.S. output report as weather-related setback that won’t alter monetary policy.
Continuing jobless claims in the week ended February 8 rose to 2.981 million from 2.944 million in the preceding week.
Holdings at ishares silver trust dropped by 0.68% i.e. 68.81 tonnes to 10081.70 tonnes from 10150.51 tonnes.
COPPER
Copper settled flat as concerns over growth in top consumer China weighed on the market, although a survey showing brisk U.S. manufacturing underpinned prices.
Chinese imports of refined copper surged around a quarter in January from the month before to their second-highest on record. Customs data on Friday showed that the world’s top consumer and producer of refined copper imported 397,459 tonnes of refined metal in January, compared to a record 406,937 tonnes in December 2011.
January imports rose 63.5 percent from a year ago and beat forecasts by traders and market who had anticipated lower arrivals in January as many factories close from the middle of that month due to the Lunar New Year holidays. Exports of refined copper stood at 25,935 tonnes in January versus 25,092 tonnes in the previous month.
In China, banks reportedly suspended financing business in property markets, and imposed strict control of total loans for housing construction and operation. In addition, People’s Bank of China Governor Zhou Xiaochuan indicated in the G20 meeting that China would strive to balance its GDP growth, structural reforms, and social stability. In the week ahead, market players will continue to pay close attention to U.S. economic data releases for further indications on the strength of the economy and the future course of monetary policy.
CRUDE
On the New York Mercantile Exchange, light sweet crude futures for delivery in April rose to 0.12% at $102.50 a barrel.
During the previous session, Nymex oil prices traded between $102.27 a barrel and $102.53 a barrel and closed at $102.38 a barrel.
U.S. oil futures were likely to find support at $100.05 a barrel, the low from February 18 and resistance at $103.29 a barrel, the high from February 19.
On the week, U.S. crude futures, also known as West Texas Intermediate or WTI, climbed 2.02%, the sixth consecutive weekly gain.
On Friday, oil prices weakened after a report showed that U.S. existing home sales fell by a larger-than-forecast 5.1% in January to hit an 18-month low.
This disappointing data came one day after the Federal Reserve Bank of Philadelphia said that its manufacturing index deteriorated to a 12-month low of minus 6.3 in February from January’s reading of 9.4.
The recent patch of soft U.S. economic data fuelled concerns that the recovery has lost momentum since the end of last year as inclement winter weather weighed on growth.
Meanwhile, forecasts for a thawing trend across the blizzard-weary U.S. Northeast over the next couple of days softened prices as well. Prices rallied to a four-month high earlier in the week amid speculation frigid weather conditions in the U.S. Northeast will boost demand for oil products, such as heating fuel.
In the week ahead, market players will continue to pay close attention to U.S. economic data releases for further indications on the strength of the economy and the future course of monetary policy.
The U.S. is to publish revised data on fourth quarter economic growth, while data on durable goods orders and consumer confidence will also be in focus…
Technical Levels

 

SUPPORT 1

SUPPORT 2

RESISTANCE 1

RESISTANCE 2

GOLD

1318

1312

1329

1339

SILVER

21.57

21.37

21.97

22.37

COPPER

3.2758

3.2513

3.3003

3.3096

CRUDE

101.61

101.04

102.85

103.50

Commodity Contract – S2 S1 R1 R2
Global Economic Data

TIME :IST

DATA

PRV

EXP

IMPACT

7.30P.M

Flash Services PMI

56.7

56.9

LOW

Existing Home Sales

Source

Market(latest release)

Measures

Level of a diffusion index based on surveyed purchasing managers in the services industry;

Usual Effect

Actual > Forecast = Good for currency;

Frequency

Released monthly, around 3 weeks into the current month;

Next Release

Mar 20, 2014

FF Notes

Data is given to Thomson Reuters subscribers 2 minutes before the public release time listed on the calendar – early market reaction is usually a result of trades made by these subscribers. Above 50.0 indicates industry expansion, below indicates contraction. There are 2 versions of this report released about a week apart – Flash and Final. The Flash release, which the source first reported in Nov 2013, is the earliest and thus tends to have the most impact;

Why Traders
Care

It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy;

Derived Via

Survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;

Acro Expand

Purchasing Managers’ Index (PMI);

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