COMEX: Daily Technical analysis Report

Alex Gray

Publish date: Tue, 11 Feb 2014, 06:23 PM

GOLD

Gold advanced overnight to open at 1277.50/1278.50, which was also the intraday high, as investors turned cautious amidst last week's weaker-than-expected U.S. jobs data and the ongoing financial crisis in emerging economies. The metal then dipped to a low of 1272.50/1273.50 while the dollar remained largely unchanged. Choppy trading for the remainder of the session led it to close at 1274.50/1275.50.

Gold closed higher today at 1274 and tried to break through resistance in the 1278/79 area. RSI is at 61.13, and is testing resistance at the previous high of 62. This is an encouraging sign, and a break would be bullish. Support is at the most recent low of 1238.

Gold edged higher on speculation that Fed would slow the pace of its stimulus tapering after a weak U.S. jobs report raised questions over the state of economic recovery.

China's gold consumption jumped 41 percent in 2013 to exceed 1,000 tonnes for the first time, as a sharp slide in prices attracted buyers for jewellery and bullion.

The U.S. central bank has said it aims to finish the tapering by the end of this year depending on the health of the labour market.

Technical Levels

	S1	S2	R1	R2
GOLD	1267	1256	1284	1291

Commodity Contract S2 S1 R1 R2

SILVER

Silver moved higher overnight to open at the session high of 20.27/20.32. It retreated to a low of 20.07/20.12 prior to concluding the session at 20.10/20.15.

Silver closed unchanged today at 20.10. Despite breaking up through a daily downtrend last week, silver is still lacking in momentum. RSI has moved higher to 54.90, but needs to break through resistance at 57.28, the January high. Price resistance is at the top of the range at 20.64, with support at the low of 18.83.

The gold-silver ratio is trading higher at 63.55. After a big drop last week, it has found some support in the high 62's. There is strong support from the uptrend which currently comes in at 61.70. Resistance is at the recent high of 65.37.

Silver gained as traders reassessed their expectations for how quickly Fed will roll back its stimulus program following the release of mixed U.S. employment data.

Mixed U.S. employment report forced investors to recalibrate their assumptions about the future course of the Federal Reserve's monetary policy.

Data on Friday showed that the U.S. economy added 113,000 jobs in January, well below expectations for jobs growth of 185,000.

Technical Levels

	S1	S2	R1	R2
SILVER	19.95	19.64	20.43	20.58

Commodity Contract S2 S1 R1 R2

COPPER

The March copper contract ended Friday's session up 0.22% to settle at USD3.236 a pound.

Futures were likely to find support at USD3.191 a pound, the low from February 6 and resistance at USD3.258 a pound, the high from January 30.

On Thursday, China will release its monthly trade data, which will be followed by inflation numbers Friday. The Asian nation is the world's largest copper consumer, accounting for almost 40% of world consumption last year.

Meanwhile, in the U.S., data on Friday showed that the economy added 113,000 jobs in January, well below expectations for jobs growth of 185,000, after December's lackluster gain of 75,000 jobs.

It was the weakest two-month stretch of job creation in three years as inclement weather contributed to a slowdown in hiring.

Yet the report also showed that the number of people participating in the labor force edged up to 63% from a 30-year low of 62.8% last month, while the unemployment rate unexpectedly ticked down to a five year low 6.6% from 6.7% in December.

Market players now looked ahead to Congressional testimony from new Federal Reserve Chair Janet Yellen later in the week for clues regarding the future of course of U.S. monetary policy.

Copper futures were little changed near a one-week high on Monday, as investors looked ahead to key economic data out of China later in the week to gauge the strength of the world's second largest economy.

Technical Levels

	S1	S2	R1	R2
COPPER	3.2083	3.1921	3.3468	3.2691

Commodity Contract S2 S1 R1 R2

CRUDE

On Monday, the New York-traded oil futures hit a session low of USD99.89 a barrel and a high of USD100.07 a barrel. The March contract settled at USD100.06 a barrel.

Nymex oil futures were likely to find support at USD97.14 a barrel, Friday's low, and resistance at USD100.75 a barrel, the high from Dec. 27.

Oil prices rose on sentiments that recent blasts of cold air have hiked demand for heating fuel and other distillates, though forecasts for moderating temperatures in the coming weeks capped gains.

Also capping gains were reports of an end to supply snags in the North Sea, while increased exports from Libya to the global market also watered down gains.

Armed protestors have occupied oil facilities in Libya up until recently, and exports from the Middle Eastern nation are normalizing.

Markets were also eager to listen to Federal Reserve Chair Janet Yellen's testimony before Congress on Tuesday, hoping the nation's new top economist will shed insight on the direction of the U.S. central bank's USD65 billion in monthly bond purchases.

Nymex crude oil prices fluctuated between small gains and losses on Tuesday during Asian trading hours on fears that recent blasts of winter storms have taken their toll on heating oil stockpiles more

than anticipated, though reports of increased supply from Libya capped the commodity's gains.

Technical Levels

	S1	S2	R1	R2
CRUDE	99.26	98.46	100.70	101.34

Commodity Contract S2 S1 R1 R2

Global Economic Data

DATE	TIME :IST	DATA	PRV	EXP	IMPACT
11.01.14	8.30P.M	Fed Chair Yellen Testifies	4		STRONG
11.01.14	8.30P.M	JOLTS Job Openings	4.00M	4.04M	STRONG

Fed Chair Yellen Testifies

FF Alert	Text of the speech due to be released 90 minutes earlier than the speaking time listed;
Description	Due to testify on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC;
Source	Federal Reserve (latest release)
Speaker	Federal Reserve Chair Janet Yellen;
Usual Effect	More hawkish than expected = Good for currency;
Next Release	Feb 13, 2014
FF Notes	The testimony usually comes in 2 parts: first she reads a prepared statement (a text version is made available on the Fed's website at the start), then the committee will hold a question and answer session. Since the questions are not4 known beforehand they can make for some unscripted moments that lead to heavy market volatility;
Why Traders Care	As head of the central bank, which controls short term interest rates, she has more influence over the nation's currency value than any other person. Traders scrutinize her public engagements as they are often used to drop subtle clues regarding future monetary policy;
Acro Expand	Federal Reserve (Fed);

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	Mar 11, 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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