Technical Commodity Outlook: GOLD, SILVER, COPEER And CRUDE

Alex Gray

Publish date: Fri, 13 Sep 2013, 05:59 PM

Gold dropped overnight as concerns over Syria receded. The metal opened at today's high of 1338.00/1339.00, and continued to decline on better than expected US jobless claims, hitting a low of 1325.50/1326.50. Prices traded around this level, closing today at 1330.50/1331.50.

Gold has closed lower today at 1331, its largest decline since late June. Support at the 100 and 50 day MA's has been broken (1356 and 1336, respectively), opening up the potential for a fall down to 1307, the 50% retracement level of the July-August rally, followed by the August 7th low at 1273.01. Resistance lies above 1350.
Gold futures traded slightly lower in the early part of Friday's Asian session, extending losses from Thursday's U.S. session, as traders dealt with lingering fears of Federal Reserve tapering.
Gold prices are likely to contract further in 2014, after tumbling for the first time in more than a decade this year with the case for bullion undone by confidence in a stabilising global economy. GFMS remained cautious on physical demand growth, saying that exceptional levels seen in the first half were unlikely to be replicated in the coming months as inventories in traditional buying stronghold China had been replenished.

SILVER

Silver traded lower overnight alongside gold, opening at 22.46/22.51. Prices touched a brief high 22.50/22.55, before plummeting further on the positive jobless data, dropping to a four week low, at 22.02/22.07. The metal closed at 22.12/22.17.
Silver was also lower, closing at 22.15. Several key support levels lie just below spot, with the 100 day MA at 21.78, the 50% retracement level of the June-August rally at 21.66, and the 50 day MA at 21.47.
The gold-silver ratio has rallied to the upper end of its recent range between 57.09 and 60.7, threatening a break of the latter, the August 20th high. Key levels to the upside consist of key retracement levels of the July-Aug decline, with the 38.2% level at 61.06 and the 50% level at 62.3.
Silver dropped after upbeat U.S. jobless claims data added to speculation the Federal Reserve will begin tapering its bond-buying program. Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken. The central bank is expected to kick-start stimulus withdrawal as soon as this month, possibly triggering new selling pressure.

COPPER

On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.225 a pound during European morning trade, down 1%. The December contract settled 0.17% lower at USD3.257 a pound on Wednesday.
Copper futures fell 1% to hit a one-week low on Thursday, as investors looked ahead to weekly data on U.S. jobless claims later in the session for indications on the strength of the economic recovery and the need for stimulus from the Federal Reserve.
Copper traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
The industrial metal came under pressure amid speculation the Fed will start tapering its bond-buying program at its upcoming policy meeting next week.

CRUDE

On the New York Mercantile Exchange, light, sweet crude futures for October delivery inched up 0.02% to USD18.62 per barrel in Asian trading Friday. The October contract settled up 0.97% at USD108.60 per barrel on Thursday.
Oil rose on concerns talks may hit snags and hike the chances of U.S.-led limited military strikes against Syria, which energy investors fear would engulf the broader oil-rich Middle East and threaten global supply.
However, OPEC member Libya has again the Middle East oil scenario because of dwindling supply. Libya has had supply issues for more than two years due to geopolitical strife and domestic attacks on oil assets.
Oil prices were mixed in Asian trade Friday as dealers monitor diplomatic efforts to make Syria give up its chemical weapons and avert a US-led military attack, analysts said.
New York's main contract, West Texas Intermediate for delivery in October, eased four cents to $108.56 a barrel and Brent North Sea crude for October rose 16 cents to $112.79.
"Investors remain cautious over the diplomatic efforts to get Syria to surrender its chemical weapons," Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said in a note.
The Assad regime in Syria on Thursday announced it would sign up to the global convention banning chemical weapons following a Russian proposal to put its toxic arsenal under international control.

The US-Russia talks have put off a planned US-led attack on Damascus for an alleged sarin gas attack by Assad forces last month that left hundreds of Syrians dead. Assad blames opposition rebels for the attack.Oil prices were also supported by fresh reports of supply disruptions in crude exporter Libya after the country's National Oil Corporation on Thursday declared force majeure on three ports.
Libyan oil exports plunged in August by more than 70 percent after protesters, including policemen and border guards, forced terminals to shut in a row over pay.

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