Gold, Silver, Copper & Crude Commodity Technical Outlook: 16 October

Alex Gray

Publish date: Wed, 16 Oct 2013, 03:44 PM

Technical Levels

	SUPPORT 1	SUPPORT 2	RESISTANCE 1	RESISTANCE 2
GOLD	1273	1263	1290	1304
SILVER	21.10	20.85	21.50	21.80
COPPER	3.280	3.263	3.315	3.361
CRUDE	101.00	100.30	101.53	102.50

Commodity Contract: S3 S2 S1 R1 R2 R3

GOLD

Gold dipped overnight to open today's session at 1259.00/1260.00. The metal touched a low of 1255.50/1256.50, before improving to peak at 1277.50/1278.50 by midmorning as equities retreated on weak US manufacturing data. Price traded around this level for the remainder of the session, closing at 1273.50/1274.50.

Gold traded slightly higher today at 1274, after making a new correction low. The price move was a 'hammer' in the candlestick charts, which is a bullish signal after an extended decline, but only if it is confirmed by a higher close tomorrow. The previous support level at 1277 acted as resistance; key support is at 1240.

Gold climbed to the Life time High as Rupee dropped and political tension over Syria increased demand for the precious metal as a store of value.

Western powers told the Syrian opposition to expect a strike against Syria President Bashar al-Assad's forces within days

SPDR Gold Trust, the world's largest gold-backed ETF, said its holdings rose 0.10 percent, or 0.90 tonnes, to 921.03 tonnes.

SILVER

Silver opened the day at the session low of 20.63/20.68. Price improved to a high of 21.25/21.30 on declining equities as investors remained cautious while US lawmakers continue to negotiate a budget deal. Silver closed the day at 21.18/21.23.

Silver closed slightly lower at 21.23, and similar to gold, today's candle may be a hammer, though again it would have to be confirmed by a higher close tomorrow. Support is at 19.85, the 76.4% retracement of the last rally, with resistance at 21.67, the 50% retracement level.

The gold-silver ratio has been grinding higher for the past 3 sessions, currently at 60.03. We have been bearish the ratio, looking for a retracement back to the 57.09 low of Aug 28th. We would stop ourselves out of this position at 62.37, the previous high.

Silver rose as weakness in rupee supported amid growing speculation the U.S. was moving closer to taking military action against Syria's government.

An early end to stimulus could hurt precious metals by drawing investors away from non-interest-bearing assets.

Holdings at ishares silver trust gained by 44.99 tonnes to 10600.69 tonnes from 10555.70 tonnes.

COPPER

On the Comex division of the New YorkMercantile Exchange, copper futures for December delivery traded at USD3.293 a pound during European morning trade, down 0.3%.

Copper prices traded in a range between USD3.288 a pound, the daily low and a session high of USD3.307 a pound.
The December contract settled 1.04% higher at USD3.303 a pound on Monday.
Copper prices were likely to find support at USD3.227 a pound, the low from October 11 and resistance at USD3.321 a pound, the high from October 8.

Copper futures fluctuated between small gains and losses on Tuesday, as investors assessed the potential for an agreement to raise the U.S. debt ceiling and avert default before the October 17 deadline.

Copper crossed 500 mark as support seen due to weakness in rupee while a potential western strike on Syria made investor bets more cautious.

The economy of China is showing clear signs of stabilisation, helped by policy support and some improvement in global demand

In the US, recent data on durable goods, single family home sales and business spending on capital goods have been disappointing.

CRUDE

On the New York Mercantile Exchange, light, sweet crude futures for November delivery rose 0.06% to USD101.27 per barrel in Asian trading Wednesday. The November contract settled lower by 1.17% at USD101.21 per barrel on Tuesday.

Oil futures were likely to find support at USD101.08 a barrel, Monday's low, and resistance at USD102.58 a barrel, Monday's high.
Hopes continued to build on Tuesday that U.S. lawmakers and the White House are closer to agreeing on a spending packaged needed to reopen the government and avoid a default.

Oil futures traded modestly higher during Wednesday's Asian despite heightened fears the U.S., the world's largest oil consumer, is inching closer to its first ever sovereign debt default.

Crude oil gained as tensions mounted in Syria, heightening geopolitical and crude oil supply risk in the Middle East.

Crude oil prices were also boosted as protesters stopped production at oil fields in Western Libya.

U.S. crude stocks rose last week while gasoline inventories declined and distillate stocks increased, API data showed.

Global Economic Data

Time	Data	PRV	EXP	Impact
7.30 pm	NAHB Housing Market Index	58	58	Medium
11.30 pm	Beige Book			Medium

NAHB Housing Market Index

Source	NAHB (latest release)
Measures	Level of a diffusion index based on surveyed home builders;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, around the middle of the current month;
Next Release	Nov 18, 2013
FF Notes	Above 50 indicates a favorable outlook on home sales, below indicates a negative outlook;
Derived Via	Survey of about 900 home builders which asks respondents to rate the relative level of current and future single-family home sales;
Acro Expand	National Association of Home Builders (NAHB);

Beige Book

Source	Federal Reserve (latest release)
Usual Effect	More hawkish than expected = Good for currency;
Frequency	8 times per year, 2 weeks before each FOMC meeting;
Next Release	Dec 4, 2013
FF Notes	This analysis is used by the FOMC to help make their next decision on interest rates. However, it tends to produce a mild impact as the FOMC also receives 2 non-public books - the Green Book and the Blue Book - which are widely believed to be more influential to their rate decision;
Derived Via	Anecdotal evidence supplied by the 12 Federal Reserve banks regarding local economic conditions in their district;
Also Called	Current Economic Conditions;
Acro Expand	Federal Open Market Committee (FOMC);

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