"Gold Silver Copper Crude" Commodity Technical Analysis Outlook: 31st Oct

Technical Levels

Commodity	Support 1	Support 2	Resistance 1	Resistance 2
Gold	1329	1318	1345	1356
Silver	22.25	22.05	22.7	22.85
Copper	3.290	3.270	3.310	3.327
Crude	96.43	96.10	96.76	97.21

Commodity Contract S2 S1 R1 R2

SILVER

After some very impressive initial action on Wednesday, December silver reversed course and at times fell back by as much as 50 cents an ounce from the Wednesday highs. With the Fed seemingly lifting the US Dollar, undermining US equities and yanking the rug out from under the gold market, it wasn't surprising to see silver fall back. December silver seemed to hold in relative proximity to the 50 day moving average at $22.52 and that level could be critical to some traders going forward.

GOLD

The gold market was held higher throughout the US trading session off what appears to have been hope for a distinctly supportive US Fed. However, in the wake of the Fed statement, gold prices came under pressure and fells back into lower levels for the day. In fact, December gold initially fell back below the 50 day moving average and fell below the prior 3 session's lows. In short, the gold trade must have been hoping for some sort of fresh easing promise from the Fed or perhaps some acknowledgment that the Fed would respond if indeed the US government shutdown wounded the US economy seriously. However, with US initial claims data to be released on Thursday the impact of the US government shut down might begin to fade into the background.

COPPER

The copper market was able to diverge with the precious metals complex early today, due in large part to ideas that sluggish US economic data would more than likely help to keep the Fed "on hold" into next year. In fact, copper managed to rally on Tuesday in the face of significant currency market adversity and news of a 5.4% rise in Chilean September copper production. Some traders feel that copper was supported by another rise in a private US home price survey yesterday, as that suggests some sectors of the US economy might have been able to withstand the temporary negative impact of the US government shutdown. 

CRUDE

December Crude Oil prices trended lower throughout the US trading session and registered a new five day low in the process. Downside action in the crude oil market was attributed to a build in US stockpiles last week, first by private industry data in the previous session then confirmed by the EIA. This morning's EIA inventory data showed a larger than expected build in crude stocks of 4.087 million barrels. Also of note in the report was the rather large build in supplies held in Cushing Oklahoma. Crude oil imports for the week stood at 7.459 million barrels per day compared to 7.656 million barrels the previous week. The refinery operating rate was up 1.4% to 87.3%. Another source of weakness in the market came from active spread activity against Brent, with the December Brent vs. WTI spread climbing to its highest level in more than seven months. December Crude Oil prices registered their low of the session in the wake of the FOMC meeting decision, which indicated a somewhat weaker economic growth outlook ahead.

Global Economic Data

Time:IST	Data	Prv	Exp	Impact
5:00 PM	Challenger Job Cuts y/y	19.10%		Low
6:00 PM	Unemployment Claims	350K	341K	Strong
7:15 PM	Chicago PMI	55.7	55.1	Medium
8:00 PM	Natural Gas Storage	87B	35B	Low

Unemployment Claims

Source	Department of Labor (latest release)
Measures	The number of individuals who filed for unemployment insurance for the first time during the past week;
Usual Effect	Actual < Forecast = Good for currency;
Frequency	Released weekly, 5 days after the week ends;
Next Release	Nov 7, 2013
FF Notes	This is the nation's earliest economic data. The market impact fluctuates from week to week - there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes;
Why Traders Care	Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions;
Also Called	Jobless Claims, Initial Claims;

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	Nov 29, 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;