GOLD
Gold declined today as investors braced for a potential US government shutdown. The metal opened at 1331.00/1332.00 and dropped to a low of 1321.50/1322.50 by mid-morning. Price recovered to peak at 1337.00/1338.00 before noon, and closed the day at 1326.00/1327.00.
Gold is closing the month lower at 1327
compared to August 30 close of 1381. This months range of 1292 to
1416 shows as an "inside month" compared to August range
of 1273 to 1433. We are neutral at these levels due to the sideways
price action. Only a close outside of recent ranges would have the
market looking for any medium term moves to 1182 or 1523.
Silver is closing the month at 21.70.
This shows as a "down" month from previous close of 23.30.
It seems like Silver has corrected the 35.35 to 18.26 move and is
now consolidating. We are neutral at current levels on the Monthly
chart. Gold Silver Ratio is higher this month to 61.18 compared to
August 30 close of 59.25. The powerful down candle of August still
over shadows the market. The bounce higher has exceeded our
estimates which leaves only July low 62.28 as the last level of
resistance after this months high of 61.73. Silver ended with losses as outlook
remained weak due to the inevitable tapering of U.S. monetary
stimulus. Congress must pass a short-term budget
by midnight on Monday in order to avoid the first government shutdown
in 17 years. Federal Reserve Bank of Dallas reported
earlier that its general business activity index increased to 12.8 in
September from 5.0 in August.
Copper dropped for the first time in a
four-day period paring its largest quarterly gain since March 2012
amid speculation about a partial shutdown of the US government. The
US Congress must approve a spending package by the end of the day to
avoid a government shutdown, and waning faith for a last-minute deal
steered investors away from oil on fears an ensuing fiscal drag may
hamper recovery. China’s markets are closed for a week
from Tuesday for Golden Week celebrations but the government will
still release its September reading for the manufacturing sector on
Tuesday. A string of reports from Europe and the US this week could
help set the tone for trade. A softer dollar also helped to underpin
copper. Copper ended with losses weighed by
investors concerns about the prospect of an imminent U.S. government
shutdown. China’s factory sector grew in
September after rising foreign orders made up for a subdued home
market. In the United States, weekly jobless
claims data last week suggested an improving labour market.
Oil traders appeared to gloss over some
decent U.S. data and focused more political haggling in the U.S. that
could result in a government closure. In U.S. economic
news out Monday, the Federal Reserve Bank of Dallas reported earlier
that its general business activity index increased to 12.8 in
September from 5.0 in August, beating market calls for the index to
remain unchanged.
Gold declined today as investors braced for a potential US government shutdown. The metal opened at 1331.00/1332.00 and dropped to a low of 1321.50/1322.50 by mid-morning. Price recovered to peak at 1337.00/1338.00 before noon, and closed the day at 1326.00/1327.00.
Gold is closing the month lower at 1327
compared to August 30 close of 1381. This months range of 1292 to
1416 shows as an "inside month" compared to August range
of 1273 to 1433. We are neutral at these levels due to the sideways
price action. Only a close outside of recent ranges would have the
market looking for any medium term moves to 1182 or 1523.
Gold turned lower as mounting worries
over a possible U.S. government shutdown kept investors in a cautious
mood. Gold could get some support in the near
term from the uncertainties around the mid-October deadline to raise
the U.S. debt ceiling. Demand for U.S. gold coins fell 81
percent in September on a year-over-year basis, as political turmoil
in Syria failed to rekindle retail buying.
Silver held up better than gold. The
metal opened the week at 21.57/21.62, traded down to a low of
21.40/21.45 alongside gold, before reversing to reach a high of
22.02/22.07 as equities retreated amid the US budget debate. Silver
closed at 21.68/21.72.
Silver is closing the month at 21.70.
This shows as a "down" month from previous close of 23.30.
It seems like Silver has corrected the 35.35 to 18.26 move and is
now consolidating. We are neutral at current levels on the Monthly
chart. Gold Silver Ratio is higher this month to 61.18 compared to
August 30 close of 59.25. The powerful down candle of August still
over shadows the market. The bounce higher has exceeded our
estimates which leaves only July low 62.28 as the last level of
resistance after this months high of 61.73. Silver ended with losses as outlook
remained weak due to the inevitable tapering of U.S. monetary
stimulus. Congress must pass a short-term budget
by midnight on Monday in order to avoid the first government shutdown
in 17 years. Federal Reserve Bank of Dallas reported
earlier that its general business activity index increased to 12.8 in
September from 5.0 in August.
On the Comex division of the New York
Mercantile Exchange, copper futures for December delivery traded at
USD3.332 a pound during European morning trade, up 0.1%.
Copper dropped for the first time in a
four-day period paring its largest quarterly gain since March 2012
amid speculation about a partial shutdown of the US government. The
US Congress must approve a spending package by the end of the day to
avoid a government shutdown, and waning faith for a last-minute deal
steered investors away from oil on fears an ensuing fiscal drag may
hamper recovery. China’s markets are closed for a week
from Tuesday for Golden Week celebrations but the government will
still release its September reading for the manufacturing sector on
Tuesday. A string of reports from Europe and the US this week could
help set the tone for trade. A softer dollar also helped to underpin
copper. Copper ended with losses weighed by
investors concerns about the prospect of an imminent U.S. government
shutdown. China’s factory sector grew in
September after rising foreign orders made up for a subdued home
market. In the United States, weekly jobless
claims data last week suggested an improving labour market.
On the New York Mercantile Exchange,
light, sweet crude futures fell 0.08% to USD102.25 per barrel in
Asian trading Tuesday. The November contract settled lower by 0.52%
at USD102.33 per barrel on Monday.
Oil traders appeared to gloss over some
decent U.S. data and focused more political haggling in the U.S. that
could result in a government closure. In U.S. economic
news out Monday, the Federal Reserve Bank of Dallas reported earlier
that its general business activity index increased to 12.8 in
September from 5.0 in August, beating market calls for the index to
remain unchanged.
Oil futures traded lower in the early
part of Tuesday’s Asian session as traders backed away from riskier
assets on fears of U.S. government shutdown. Crude oil dropped as tensions over Iran
eased and a potential U.S. government shutdown clouded the outlook
for demand. Exports from Iran have more than halved
in recent years to around 1 million barrels per day in 2012 due to
tightening sanctions. Supplies concerns have also eased in
recent weeks as exports from Libya recovered to above 580,000 barrels
per day.
Technical Levels
| SUPPORT 1 | SUPPORT 2 | RESISTANCE 1 | RESISTANCE 2 | |
| GOLD | 1315 | 1315 | 1344 | 1344 |
| SILVER | 21.39 | 21.07 | 22.06 | 22.42 |
| COPPER | 3.2981 | 3.2733 | 3.3436 | 3.3643 |
| CRUDE | 101.33 | 100.33 | 103.04 | 104.75 |
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