GOLD, SILVER ,COPPER & CRUDE Commodity Outlook: 30 Sept 2013

Technical Levels

	SUPPORT 1	SUPPORT 2	RESISTANCE 1	RESISTANCE 2
GOLD	1324	1309	1348	1358
SILVER	21.43	21.04	21.20	22.57
COPPER	3.3036	3.2778	3.3431	3.3568
CRUDE	101.59	100.82	103.64	103.64

GOLD

Precious metals jumped in pre-market trading today while equities declined as US lawmakers vote to avert a government shutdown by October 1st. Gold opened at 1341.50/1342.50, touched a high of 1343.50/1344.50 early on, before trading lower to bottom at 1333.00/1334.00 by mid-morning. The metal closed the week at 1338.00/1339.00. Gold closed higher this week at 1338 after 4 straight down weeks. Gold has tested and held an important support level, which is the 50% retracement of the June to August rally, at 1307.16. There is also Fibonacci level convergence in that area, reinforcing its importance as support, as 1301.78 is the 50% retracement of the long-term rally from 2008 to 2011. RSI has also moved higher, testing and holding the low-40 support area, but has not yet broken higher. We will need to see another strong weekly close before the bulls get excited again, given the weak trading of the past 4 weeks. Support is at the recent low at 1292. Gold rose driven up by a possible shutdown of U.S. government operations next week and the threat of a debt default in mid-October. Charles Evans told there was a “decent chance” that tapering could start in October or December, but it could be pushed into 2014.”

China’s gold output in the first seven months of the year totalled 232.189 tonnes, up 11.5 percent from the same period last year.

SILVER 

Silver was also higher in pre-market, opening at the session high of 22.06/22.11. Price was unable to hold on to this level, dropping to a low of 21.70/21.75 by mid-morning. Silver closed the week flat at 21.79/21.84. Silver closed down slightly at 21.79, the third consecutive down week. Support is at 21.20, the recent low. Resistance is at 22.48, the 38.2% retracement of the June to August rally. RSI is at 42.57, and has yet to break into bullish territory on the Weekly chart. The trend is still bearish on the Weekly chart. 

The gold-silver ratio is trading higher this week at 61.44. The ratio has broken higher above Fibonacci convergence in the 60.90 to 61.06, which opens up a retracement higher to 62.28, the 50% retracement of the July to August downtrend.

 Silver rose after investors avoided dollar out of fears that budgetary impasse in U.S. Congress may lead to a partial government shutdown in October. The U.S. government braced for the possibility of a partial shutdown of operations on Oct. 1

Concern over congressional wrangling over the U.S. budget sand debt negotiations in Washington contributing to rally.

COPPER

On the Comex division of the New YorkMercantile Exchange, copper futures for December delivery traded at USD3.322 a pound during European morning trade. Copper settled up 2.56% recovered ahead of key manufacturing data out of China today, to gauge the economic strength of the world’s largest copper consumer. 

While Deadlocked US budget talks worried investors, pushing US stocks markets down. On the bright side, Chinese economy to avert a slowdown in the second half of the year and to achieve a 7.75% growth for the whole of 2013 based on recent positive economic figures, boosting market sentiment and sending the US dollar down slightly. 

Copper rose amid brighter economic data and after comments from a voting member of FOMC fanned hopes of sustained accommodative measures. More than a quarter of the copper are waiting to be delivered out of warehouses there, but the wait time for metal can be months. Copper stockpiles in New Orleans warehouse have vanished this summer as quickly as they appeared.

CRUDE

On the New York Mercantile Exchange, light, sweet crude futures for November delivery slid 1.16% to USD101.68 per barrel in Asian trading Monday. The November contract settled lower by 0.16% at USD102.87 per barrel last Friday. The September reading of the China HSBC Purchasing Managers’ Index came in at 50.2, well below the flash reading of 51.2 and estimates calling for 51.2. Readings above 50 indicate expansion.

"The September HSBC China Manufacturing PMI edged up slightly from August. New orders remained flat from the previous month, while external demand improved,"said HSBC China chief economist, Hongbin Qu, in a statement. "Manufacturers restocking process continued but remained relatively slow. Growth is bottoming out on Beijing’s mini-stimulus. We expect continuous policy efforts to sustain the recovery."

Oil futures traded sharply lower during Monday’s Asian session after a critical economic data point out of China surprised to the downside. Crude rose as rupee weakness supported prices but pressure seen as a U.S.-Russia deal to remove chemical weapons from Syria. Crude oil seen support amid worries that a military assault against Syria would disrupt oil supplies in the Middle East. Soft U.S. data eventually led selling pressure by fueling concerns that U.S. recovery still faces potholes.

 

Global Economic Data

TIME	DATA	PRV	EXP	IMPACT
7.15P.M	Chicago PMI	53	54.5	MEDIUM

Chicago PMI

Source	MNI(latest release)
Measures	Level of a diffusion index based on surveyed purchasing managers in the Chicago area;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, on the last business day of the current month;
Next Release	Oct 31, 2013
FF Notes	Data is given to MNI subscribers 3 minutes before the public release time listed on the calendar - early market reaction is usually a result of trades made by these subscribers. Above 50.0 indicates expansion, below indicates contraction;
Why Traders Care	It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy;
Derived Via	Survey of around 200 purchasing managers in Chicago which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;
Also Called	Chicago Business Barometer;
Acro Expand	Purchasing Managers' Index (PMI);