COMEX Technical Anlaysis Report

Posted: March 18, 2014 in Uncategorized

Gold spiked overnight as investors awaited news on possible sanctions against Russia after Crimea voted to leave the Ukraine. The move however was short lived and the metal quickly retreated to open virtually unchanged at 1377.50/1378.50. Sideways trade throughout the day until selling interest emerged as the dollar started to recovered, taking the metal to a low of 1369.25/1370.25 prior to concluding the session at 1372.00/1373.00.
Gold had a bearish day today, making a new intraday high but then closing lower at 1372; a potential reversal warning. RSI is showing bearish divergence, having failed to make a new high on the new price high. While the longer-term uptrend still looks healthy, gold may face a test of the uptrend support which currently comes in at 1339. There should also be support from the top of the previous range, at 1355. Resistance is at the intraday high in the 1383 area.
Gold prices fell as a sharp rally in U.S. equities triggered profit-taking after bullion briefly rose in last some sessions.
Investors’ appetite for risk diminished in view of increasing political tensions and economic troubles, which benefit gold.
SPDR gold trust holding dropped by 3.81 tonnes i.e. 0.47% to 812.78 tonnes from 816.59 tonnes.
Silver moved higher and later retreated alongside gold overnight to open at 21.23/21.28. It quickly touched a low of 21.20/21.25 before proceeding to an intraday high of 21.40/21.45. The metal concluded the session at 21.24/21.29.
Silver closed lower today at 21.24. The metal has struggled to break out of its sideways range. Support is at the recent low of 20.61, with resistance at Friday’s high of 21.79. We remain neutral.
Silver dropped tracking weak gold prices after Crimea voted to join Russia and leave Ukraine on Sunday with no widespread violence
Fed will most likely to announce another $10 billion cut to its bond-buying stimulus after solid U.S. retail sales and employment data
Investors remained cautious after Russia launched new military exercises near its border with Ukraine, showing no sign of backing down on plans to annex Crimea.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery fell to a session low of $2.922 a pound, before trimming losses to last trade at $2.946 a pound during European morning hours, down 0.15%, or $0.004 cents.The May copper contract rose 0.94%, or 0.275 cents to settle at $2.950 a pound on Friday.Futures were likely to find support at $2.912 a pound, the low from March 14 and resistance at $2.977 a pound, the high from March 13.
Results showed that nearly 97% of voters in Crimea chose to break away from Ukraine and join Russia in a referendum deemed illegal by the European Union and the U.S.
Russia’s lower house of parliament has stated that it will pass legislation allowing Crimea to join the nation in the “very near future.”
U.S. President Barack Obama said Washington rejected the results of the referendum and warned that the U.S. was ready to impose sanctions on Moscow.
Western countries have threatened to ratchet up sanctions against Russia if it does not back down on annexing Crimea.
Copper has been under heavy selling pressure in recent sessions as growing concerns over the health of China’s economy dampened demand for growth-linked assets.
The industrial metal fell to $2.908 a pound on March 12, the lowest since July 2010.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for April delivery was flat to trade at $1,378.90 a troy ounce, while silver for May delivery shed 0.15% to trade at $21.38 an ounce.
Market players looked ahead to key U.S. economic data later in the day for further indications on the strength of the economy and the future course of monetary policy.
The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.
Copper prices edged lower on Monday, as concerns escalated over Ukraine after results of Sunday’s referendum showed voters in Crimea voting to join Russia..
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in May traded at $97.56 a barrel, down 0.07%, after hitting an overnight session low of $97.01 a barrel and a high of $98.91 a barrel.
Brent crude on the ICE futures exchange fell $1.97, or 1.8%, to $106.24 a barrel on Monday, its lowest settlement price since Feb. 4.
Investors continued to monitor events in Europe, after over 90% of Crimean voters on Sunday chose to break with Ukraine and join Russia. Crimea’s Parliament on Monday formally asked to join the Russian Federation.
Sanctions followed as expected.
European Union foreign ministers imposed travel bans and asset freezes on 21 people they have linked to the push to have Crimea secede from Ukraine to be annexed by Russia. U.S. President Barack Obama also imposed sanctions on several Russian officials involved in the incursion of Crimea, which included freezing assets in the U.S.
Still, markets were expecting more widespread action from the West, and the response enticed investors away from oil by allaying fears the conflict could escalate and threaten energy supply from Russia.
Investors took hit-or-miss U.S. economic indicators in stride.
Data revealed earlier that U.S. industrial production rose 0.6% in February, exceeding expectations for a 0.1% gain. Industrial production in January was revised to a 0.2% fall from a previously estimated 0.3% decline.
Crude price were slightly weaker in Asian trade on Tuesday as relatively tame sanctions from the West on Russia, the world’s top oil producer, over the annexation of the Crimean region of the Ukraine allayed concerns of any abrupt cutoff in supplies.
Technical Levels

GOLD 1368 1358 1388 1398
SILVER 21.13 20.89 21.64 21.91
COPPER 2.9865 2.9600 3.0300 3.0470
CRUDE 98.20 97.50 99.42 100.64
Global Economic Data
6.00P.M Building Permits 0.94M 0.97M STRONG
6.00P.M Core CPI m/m 0.1% 0.1% STRONG
6.00P.M Housing Starts 0.88M 0.92M MEDIUM
6.30P.M TIC Long-Term Purchases -45.9B 23.4B MEDIUM
Building Permits
Source Census Bureau(latest release)
Measures Annualized number of new residential building permits issued during the previous month;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 17 days after the month ends;
Next Release Apr 16, 2014
FF Notes While this is monthly data, it’s reported in an annualized format (monthly figure x12);
Why TradersCare It’s an excellent gauge of future construction activity because obtaining a permit is among the first steps in constructing a new building;
Also Called Residential Building Permits;
Source Census Bureau(latest release)
Core CPI m/m
Source Bureau of Labor Statistics (latest release)
Measures Change in the price of goods and services purchased by consumers, excluding food and energy;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 16 days after the month ends;
Next Release Apr 15, 2014
FF Notes Food and energy prices account for about a quarter of CPI, but they tend to be very volatile and distort the underlying trend. The FOMC usually pays the most attention to the Core data – so do traders;
Why TradersCare Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate;
Also Called CPI Ex Food and Energy, Underlying CPI;
Acro Expand Consumer Price Index (CPI), Federal Open Market Committee (FOMC);
Housing Starts
Source Census Bureau(latest release)
Measures Annualized number of new residential buildings that began construction during the previous month;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 17 days after the month ends;
Next Release Apr 16, 2014
FF Notes While this is monthly data, it’s reported in an annualized format (monthly figure x12). This data is slightly overshadowed by Building Permits because they are tightly correlated and a permit must be issued before a house can begin construction;
Why TradersCare It’s a leading indicator of economic health because building construction produces a wide-reaching ripple effect. For example, jobs are created for the construction workers, subcontractors and inspectors are hired, and various construction services are purchased by the builder;

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