Overnight Commodity Outlook: GOLD, SILVER, COPPER And CRUDE

Alex Gray

Publish date: Fri, 20 Sep 2013, 05:52 PM

Gold fell for the first time in three days, cutting a weekly gain, as a rally following the Federal Reserve's decision to hold stimulus curbed physical demand and as data showed signs the U.S. economy is improving.
Silver for immediate delivery fell 1.8 percent to $22.6472 an ounce in London, cutting its weekly gain to 1.9 percent, the most in four weeks. Platinum slipped 0.7 percent to $1,453.75 an ounce. Palladium declined 1.4 percent to $724 an ounce.

GOLD

Gold moved higher overnight to open at 1370.00/1371.00 after yesterday's Fed announcement that it would not taper its bond purchase program. It declined to a low of 1358.50/1359.50 on the back of better than expected Claims and Philly Fed numbers. Buying throughout the rest of the day saw the metal rally to a high of 1374.50/1375.50 prior to concluding the day at 1368.75/1369.75.

Gold closed higher today at 1369, following yesterday's strong gain. Support is at 1337, the 38.2% retracement of the June 28 to August 28 uptrend. Resistance is at 1433, the most recent major high. Technicals are starting to look a bit more positive, but we would still prefer to see a weekly close higher to signal a resumption of the uptrend that has been in place since late June.

Gold rose after the Federal Reserve shocked markets by choosing not to cut back on its asset-buying programme for now.

Fed Chairman said he wanted to "wait a bit longer and to try to get confirming evidence" that the economy is showing signs of lasting improvement.

SPDR Gold Trust said its holdings rose 0.10 percent, or 0.88 tonnes, to 912.00 tonnes.

Technical Levels
Support-1: 1360 Support-2: 1351

Resistance-1: 1377 Resistance-2: 1393

SILVER

Silver also improved overnight to open at 23.31/23.36. It declined to a low of 23.00/23.05 before rallying to an intra-day high of 23.39/23.44 amidst buying pressure. It traded within range for the remainder of the day before concluding the session at 23.21/23.26.

Silver closed higher at 23.21. The RSI (Relative Strength Index) is at 53.41, after testing the low-40 support area. RSI previously traded up to 80 on the last price high in silver; this 40 to 80 range is generally bullish. Support is at 22.48, which is the 38.2% retracement of the June 28 to Aug 28 range. Resistance is at the major high of 25.10.

The gold-silver ratio is trading lower at current 59.26. It has been in a sideways consolidation since August 15th. We still see the risk to the downside. Support is at the consolidation lows in the low-57s, with resistance at yesterday's high at 61.13.

Silver rose as news that the Federal Reserve refrained from tapering its stimulus program weighed on the U.S. dollar, sending the precious metal sharply higher.

Bernanke refused to commit to reducing bond purchases this year, saying the stimulus program was "not on a preset course."

Holdings at ishares silver trust rose by 104.93 tonnes to 10602.67 tonnes from 10497.74 tonnes.

Technical Levels
Support-1: 22.82 Support-2: 22.52

Resistance-1: 23.39 Resistance-2: 23.83

COPPER

On the Comex division of the NewYork Mercantile Exchange, copper futures for December delivery traded at USD3.346 a pound during European morning trade, Trading range of copper today between 3.376 to 3.325.

Copper on LME was poised for the biggest weekly gain in a year after the Federal Reserve unexpectedly maintained monetary stimulus in the U.S., the second-biggest consumer of the metal.

Copper dropped as rupee firmness weighed but downside was limited as the Federal Reserve's decision to hold its stimulus supported prices.

Fed's Bernanke did not commit to reducing the bond purchases this year, and instead went out of his way to stress the program was "not on a preset course."

The global refined copper market was in a 200,000-metric-ton surplus during the first seven months of the year - WBMS.

Technical Levels
Support-1: 3.3326 Support-2: 3.3153

Resistance-1: 3.3601 Resistance-2: 3.3703

CRUDE

On the New York Mercantile Exchange, light, sweet crude futures for November delivery fell 0.34% to USD105.50 per barrel in Asian trading Friday. The November contract settled down 1.32% to USD105.86 per barrel on Thursday.

Prices soared on Wednesday after the Energy Information Administration reported that U.S. crude oilstockpiles dropped by 4.37 million barrels in the week ending Sept. 13, well beyond expectations for a decline of 1.39 million barrels and far past a decline of 219,000 barrels in the previous week.
Profit-taking kicked in by Thursday, especially on sentiment that a U.S.-led attack on Syria is becoming increasingly less likely now that diplomatic efforts appear to poised to prompt Damascus to hand over its cache of chemical weapons.

Oil futures traded lower during Friday's Asian session after some of the post-Federal Reserve meeting euphoria wore off the commodities complex and despite some solid U.S. data points out Thursday.

Technical Levels
Support-1: 105.31 Support-2: 104.10

Resistance-1: 108.22 Resistance-2: 110.06

Global Economic Data

TIME	DATA	IMPACT
10.00P.M	FOMC Member George Speaks	MEDIUM
10.10P.M	FOMC Member Tarullo Speaks	LOW
10.25P.M	FOMC Member Bullard Speaks	STRONG

FOMC Member George Speaks

Description	Due to speak about the economy at the Manhattan Institute of Policy Research, in New York;
Source	Federal Reserve Bank of Kansas City(latest release)
Speaker	Federal Reserve Bank of Kansas City President Esther George;
Usual Effect	More hawkish than expected = Good for currency;
Next Release	Sep 24, 2013
FF Notes	2013 FOMC voting member;
Why Traders Care	Federal Reserve FOMC members vote on where to set the nation's key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy;
Acro Expand	Federal Open Market Committee (FOMC);

FOMC Member Bullard Speaks

Description	Due to speak about the US economy and monetary policy at the Association of Economists luncheon, in New York. Audience questions expected;
Source	Federal Reserve Bank of St. Louis(latest release)
Speaker	Federal Reserve Bank of St. Louis President James Bullard;
Usual Effect	More hawkish than expected = Good for currency;
FF Notes	FOMC voting member 2010 and 2013;
Why Traders Care	Federal Reserve FOMC members vote on where to set the nation's key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy;
Acro Expand	Federal Open Market Committee (FOMC);

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