COMEX : Technical Analysis Outlook

Posted: March 11, 2014 in Uncategorized

Gold edged marginally higher overnight to open at 1339.50/1340.50. It dropped to a low of 1335.50/1336.50 as the U.S. Employment Trends Index (ETI) beat forecasts to move higher indicating that the Fed will continue trimming its monthly asset purchase program. The metal then surged to a high of 1344.25/1345.25 following news that Russian troops opened fire while taking s iege of a Ukrainian military post in Crimea and concerns over Chinese trade data that showed a fall in exports. It consolidated later in the afternoon to finally close at 1341.00/1342.00.
Gold was unchanged today, closing at 1341. Trading for the past two weeks has been in a sideways range, characterized by a lack of momentum. Gold is now getting close to testing an uptrend line which comes in around 1324. We remain bullish so long as the low of 1307 holds. Resistance is at the top of the range in the 1354 area.
Gold recovered to settled flat as investors continued to monitor events in Ukraine, where tension over moves by neighboring Russia in the Crimean region have heightened demand.
Precious metals were lower earlier as expectations that Fed will continue to gradually reduce the pace of its stimulus program weighed.
SPDR gold trust holding gained by 7.50 tonnes i.e. 0.93% to 812.70 tonnes from 805.20 tonnes.
Silver moved higher overnight to open at 20.98/21.03, which was also the session high. It dropped to a low of 20.80/20.85 prior to concluding the session at 20.88/20.93.
Silver closed lower today at 20.88. The metal has now retraced a good part of its gains from its breakout on February 14th. While the breakout was very strong with good momentum behind it initially, RSI has now fallen from a high of 76.76 to present levels at 47.75. If silver falls back into its previous range, with resistance in the 20.60’s, it will be bearish for the metal. We are currently neutral.
The gold-silver ratio is trading higher at 64.36. Support from the uptrend comes in at 62.50. Resistance is at the most recent major high of 65.37.
Silver seen under pressure after strong U.S. jobs data eased worries of an economic slowdown and dimmed the metal’s safe-haven appeal.
Market players will be anticipating what will be closely-watched U.S. data on retail sales and consumer sentiment later in the week for further indications of the strength of the economy
The gold/silver ratio hit a fresh five-week high at 64.4 as silver underperformed on Monday.
Copper settled down -1.77% recovered from the day’s low on speculation China’s government is taking steps to soothe nerves jangled by a poor trade report that inflamed fears of flagging growth in the world’s top user of metals.
Adding to the downward pressure, China’s exports unexpectedly tumbled in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world’s second-largest economy, even though the Lunar New Year holidays were blamed for the slide.
A further hit came from China’s imports of unwrought copper, which fell 30 percent in February from January due to weak Shanghai copper prices. Imports were still up 27 percent from last year’s levels, however. China is the world’s top user of copper, accounting for 40 percent of global demand. But much of its imports are used as collateral to raise funds, which are then loaned out in China’s shadow banking sector.
Worries that these financing deals could unravel have intensified since China recorded its first domestic bond default on Friday, when loss-making solar equipment producer Chaori Solar missed an interest payment. Elsewhere, U.S. job growth accelerated sharply in February despite the icy weather that gripped much of the nation, easing fears of an abrupt economic slowdown and keeping the Fed on track to continue reducing its monetary stimulus.
Crude oil settled down -2.01% after poor Chinese trade figures spooked investors with fears emerging-market economies are cooling and will consume less fuel and energy.
Data released over the weekend showed that Chinese exports collapsed 18.1% in February from a year earlier, disappointing expectations for a 6.8% increase. According to customs data, China’s February crude oil imports totaled 23.05mmt, down 18.1% from January.
The significant decline in China’s exports led to a deficit of $22.98 billion last month, compared to a surplus of $31.86 billion in January. The data added to fears over a slowdown in the world’s second largest economy, and overshadowed last Friday’s stronger-than-forecast U.S. jobs report for February. Pressure is mounting as expectations of an increase in stockpiles in the world’s biggest oil consumer as cold weather ebbed, reducing demand for heating fuels.
The survey, taken ahead of weekly inventory reports from the API and from the U.S. Department of Energy’s EIA, showed crude stocks climbed 2.2mbls on average for the week to March 7. Also the US will signal its resolve to protect its NATO allies near Russia’s borders on Tuesday with the start of the first joint military training exercises in the region since the Kremlin intervened in Ukraine. A tanker that loaded oil from a rebel-held port in eastern Libya has been halted by government forces but it has not yet reached a port controlled by government forces…
Technical Levels

GOLD 1331 1320 1348 1355
SILVER 20.69 20.50 21.07 21.26
COPPER 3.0823 3.0541 3.1458 3.1811
CRUDE 100.37 98.40 102.30 103.56

Commodity Contract- S2 S1 R1 R2
Global Economic Data

7.30P.M JOLTS Job Openings 3.99M 4.02M STRONG

JOLTS Job Openings

Source Bureau of Labor Statistics (latest release)
Measures Number of job openings during the reported month, excluding the farming industry;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 40 days after the month ends;
Next Release Apr 8, 2014
FF Notes It’s released late, but can impact the market because job openings are a leading indicator of overall employment;
Acro Expand Job Openings and Labor Turnover Summary (JOLTS);

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