COMEX Report On Technical Analysis

Posted: February 25, 2014 in Uncategorized

GOLD
Gold advanced overnight to open at 133Image2.50/1333.50. It retreated to a low of 1328.25/1329.25 as investors gauged the pace of economic recovery in the U.S. while Chinese data showed a decline in the rise of home prices for the first time in over a year. The metal then surged to a four-month high of 1338.50/1339.50 tracking gains in U.S. equities buoyed by M&A activity as the S&P 500 reached an all-time high while the Nasdaq touched a 14-year high amidst a wide market rally. Thereafter, it was mostly range bound to finally close the day at 1337.00/1338.00.
Gold had a strong rally today, breaching resistance in the 1330’s from previous highs, and closing at 1337. Unfortunately there is some RSI divergence, as RSI failed to make a new high on the new price high. We will watch this development, but remain bullish so long as gold trades above support in the 1308 level. The next resistance is at 1337; today’s close, as this is also the 61.8% retracement of the Aug to Dec 2013 downtrend. The next resistance is at 1360-62, the highs from Oct 2013.
Gold gained as investors grew more anxious about economic and political uncertainty over Ukraine.
Weak U.S. manufacturing data and a slowdown in rise in home prices in China raised fresh concerns over the economies, drawing investors towards gold.
SPDR gold trust holding gained by by 3.30 tonnes i.e. 0.41% to 801.61 tonnes from 798.31 tonnes.

SILVER
Silver moved higher overnight to open at 22.00/22.05. It dropped to a low of 21.90/21.95 before climbing to a high of 22.15/22.20 as the 10-day MA moved above the 200-day MA, prior to concluding the session at 22.02/22.07.Image
Silver also closed higher at 22.02, stalling very close to resistance in the 21.97 level. This is the 50% retracement of the Aug to Dec 2013 downtrend. There is also bearish RSI divergence as noted with gold. However, we remain bullish so long as we hold 21.32, the 38.2% retracement of the same downtrend. The next resistance is at 22.71, the 61.8% retracement level.
The gold-silver ratio is trading slightly higher at 60.75. Since its big drop on Feb 14th through its uptrend support line, the ratio has been consolidating. We are bearish the ratio as long as it stays below this prior support line, which is currently at 62.10. The risk is for a full retracement to the 57.10 low from Sep 2013.
Silver rose as doubts over the U.S. economic recovery boosted the appeal of the precious metal.
The recent patch of soft U.S. economic data fuelled expectations that U.S. monetary policy will remain accommodative.
Holdings at ishares silver trust gained by 0.12% i.e. 11.97 tonnes to 10159.49 tonnes from 10147.52 tonnes.

COPPER
A cooler property sector not only weighs on demand for copper as construction material, but also dampens consumption from the home appliances sector.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.Image
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery fell to a session low of $3.213 a pound, the weakest level since February 11.
Copper prices last traded at $3.230 a pound during European morning hours, down 0.95%. The March copper contract ended Friday’s session down 0.03% to settle at $3.260 a pound.
Futures were likely to find support at $3.202 a pound, the low from February 11 and resistance at $3.264 a pound, the high from February 21.
Data released by China’s National Bureau of Statistics earlier showed that average new home prices in China’s 70 major cities rose 9.6% in January from a year earlier, easing from the previous month’s 9.9% increase.
It was the first slowdown in the rate of price increases since November 2012. The slight deceleration comes amid attempts by policymakers to cool the property sector and rein in lending.
Meanwhile, market players looked ahead to key U.S. data later in the week to further gauge the strength of the economy. 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.
The U.S. is second behind China in global copper demand.
Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers significantly reduced their bearish bets in copper futures in the week ending February 18.
Copper futures fell 1% to hit a nine-day low on Monday, after data showed that Chinese home prices fell for the first time in 14 months in January.

CRUDE
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in April traded at $102.61 a barrel during Asian trading, down 0.16%.
On Monday, the New York-traded oil futures hit a session low of $102.58 a barrel and a high of $102.87 a barrel to settle at $102.78 a barrel.Image
Nymex oil futures were likely to find support at $101.71 a barrel, Friday’s low, and resistance at $104.06 a barrel, the high from Oct. 8.
On Monday, market talk that inventories are set to fall at a widely-watched delivery point in Cushing, Oklahoma sent oil prices rising.
In January, the Keystone XL pipeline linking Cushing, Oklahoma, to the U.S. Gulf Coast began making deliveries, which was to end bottlenecks and supply gluts in the U.S.
Forecasts for a powerful winter storm to trek across the U.S. this week as well as ongoing political instability in Libya, South Sudan and Venezuela also supported the commodity.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for April delivery were up 0.02% and trading at US$110.68 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$8.07 a barrel.
Nymex crude prices fell during Asian trading hours on Tuesday as the markets tried to balance the concerns of the slowdown in emerging economies with the strength of stock markets in the U.S. and conflicts in the Middle East.
Technical Levels

SUPPORT 1 SUPPORT 2 RESISTANCE 1 RESISTANCE 2
GOLD 1326 1315 1344 1350
SILVER 21.65 21.25 22.31 22.57
COPPER 3.2370 3.2040 3.2920 3.3140
CRUDE 102.04 101.26 103.52 104.22

Global Economic Data

TIME :IST DATA PRV EXP IMPACT
7.30P.M S&P/CS Composite-20 HPI y/y 13.7% 13.3% MEDIUM
8.30P.M CB Consumer Confidence 80.7 80.2 STRONG

S&P/CS Composite-20 HPI y/y

Source Standard & Poor’s (latest release)
Measures Change in the selling price of single-family homes in 20 metropolitan areas;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 60 days after the month ends;
Next Release Mar 25, 2014
FF Notes This is one of the few non-seasonally adjusted numbers reported on the calendar, as it’s the primary calculation for this indicator;
Why Traders
Care
It’s a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity;
Acro Expand Standard & Poor’s (S&P), Case-Shiller (CS), House Price Index (HPI);
Source Standard & Poor’s (latest release)

CB Consumer Confidence

Source The Conference Board Inc. (latest release)
Measures Level of a composite index based on surveyed households;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, on the last Tuesday of the current month;
Next Release Mar 25, 2014
Why Traders
Care
Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity;
Derived Via Survey of about 5,000 households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation;
Acro Expand The Conference Board (CB);
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