COMEX: Technical Analysis Outlook

GOLD

Gold moved higher overnight to open at 1264.00/1265.00. It touched a high of 1268.50/1269.50 generating “safe haven” interest following the ongoing financial crisis in emerging markets, particularly in Argentina, which dragged global equities lower. The metal then dropped to a low of 1261.00/1262.00 as investors geared up for the Fed’s policy statement, before finally closing the session at 1262.00/1263.00. Following the close, the metal traded within range despite the Fed announcement of a further $10 billion cut to bring its monthly bond purchases down to $65 billion.

Gold traded higher today, closing at 1263. Resistance sits at 1278-79, from the 38.2% retracement of the August to December 2013 downtrend, and from Monday’s high. Support is at the recent low of 1231. RSI has turned higher, and is testing resistance at 62 (currently at 60.33).

Gold gained as stock markets surrendered early gains to fall ahead of a policy statement from the Federal Reserve.

Fed said it would trim its bond purchases by another $10 billion as it stuck to a plan to wind down its extraordinary economic stimulus

SPDR gold trust holding gained by 2.10 tonnes i.e. 0.27% to 792.56 tonnes from 790.46 tonnes.

Technical Levels

	S 1	S 2	R 1	R 2
GOLD	1250	1239	1272	1282

Commodity Contract: S2 S1 R1 R2 (Trading Tips)

SILVER

Silver edged higher overnight to open at 19.70/19.75. After posting a high of 19.95/20.00, it declined steadily to close at the session low of 19.54/19.59.

Silver is also trading higher at 19.59. Silver continues to be trapped within a sideways range, with the range high being 20.64, and the range low being 18.84. There is also a downtrend on the daily chart which comes in at 20.17. 

The gold-silver ratio is trading lower today at current 64.15. This is the first lower close after six sessions higher. Resistance is at the 67.56 high. There is strong support from the daily uptrend which currently comes in at 61.38.

Silver rose as ongoing turbulence in emerging markets boosted the safe haven appeal of the precious metal.

Prices earlier seen pressure as market sentiment improved after Turkey’s central bank announced aggressive rate hikes in an effort to stem the lira’s decline.

The U.S. Federal Reserve announced a further reduction in its bond-buying stimulus.

Technical Levels

	S 1	S 2	R 1	R 2
SILVER	19.35	19.14	19.86	20.17

Commodity Contract: S2 S1 R1 R2 (FREE Trail)

COPPER

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery hit a session high of USD3.268 a pound, before trimming gains to trade at USD3.262 during European morning trade, up 0.3%.

The March copper contract fell to USD3.246 a pound on Tuesday, the lowest since December 9, before paring losses to settle at USD3.253 a pound, down 0.18%.

Copper futures were likely to find support at USD3.246 a pound, the low from January 28 and resistance at USD3.287 a pound, the high from January 27.

Appetite for riskier assets improved after Turkey’s central bank announced aggressive rate hikes overnight in an effort to stem the lira’s decline.

Turkey's central bank raised its overnight lending rate to 12% from 7.75% and its repurchase rate to 10% from 4.5% in its first emergency meeting since 2011.

The move eased concerns over emerging markets, following a broad based selloff last Friday, triggered by worries over the impact of reduction in Fed stimulus

and concerns over a possible slowdown in China.

Copper futures edged mildly higher on Wednesday, as global markets rebounded after an aggressive rate hike by the Turkish central bank and ahead of a policy announcement by the Federal Reserve later in the day.

Technical Levels

	S 1	S 2	R 1	R 2
COPPER	3.2286	3.2168	3.2606	3.2808

Commodity Contract: S2 S1 R1 R2 (Trading Signals)

CRUDE

On Wednesday, the New York-traded oil futures hit a session low of USD97.38 a barrel and a high of USD97.59 a barrel. The March contract settled at USD97.42 a barrel.

Nymex oil futures were likely to find support at USD95.22 a barrel, Monday's low, and resistance at USD97.65 a barrel, Tuesday's high.

Meanwhile on Wednesday, the U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 6.4 million barrels in the week ended Jan. 24, far beyond expectations for an increase of 2.3 million barrels, which sent prices falling by fanning fears the country remains awash in supply.

Total U.S. crude oil inventories stood at 357.6 million barrels as of last week.

The report also showed that total motor gasoline inventories decreased by 819,000 barrels compared to forecasts for a gain of 1.1 million barrels.

NYMEX crude oil prices rose during Asian trading hours on Thursday after Federal Reserve decided to cut USD10 billion from its USD75 billion monthly bond-buying program and U.S. supply data disappointed investors.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March traded at USD97.62 a barrel during Asian trading, up 0.26%

Technical Levels

	S 1	S 2	R 1	R 2
CRUDE	96.53	95.71	97.96	98.57

Commodity Contract: S2 S1 R1 R2 (Free Signals)

Global Economic Data

TIME	DATA	PRV	EXP	IMPACT
7.00P.M	Advance GDP q/q	4.1%	3.3%	STRONG
7.00P.M	Unemployment Claims	326K	331K	STRONG
7.00P.M	Advance GDP Price Index q/q	2.0%	1.2%	MEDIUM
8.30P.M	Pending Home Sales m/m	0.2%	-0.1%	STRONG

Advance GDP q/q

Source	Bureau of Economic Analysis (latest release)
Measures	Annualized change in the inflation-adjusted value of all goods and services produced by the economy;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released quarterly, about 30 days after the quarter ends;
Next Release	Apr 30, 2014
FF Notes	While this is q/q data, it's reported in an annualized format (quarterly change x4). There are 3 versions of GDP released a month apart – Advance, Preliminary, and Final. The Advance release is the earliest and thus tends to have the most impact;
Why Traders Care	It's the broadest measure of economic activity and the primary gauge of the economy's health;
Also Called	GDP First Release, Estimated GDP;
Acro Expand	Gross Domestic Product (GDP);

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	Feb 6, 2014
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. Unemployment is also a major consideration for those steering the country's monetary policy;
Also Called	Jobless Claims, Initial Claims;

Pending Home Sales m/m

Source	National Association of Realtors (latest release)
Measures	Change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, about 28 days after the month ends;
Next Release	Feb 28, 2014
FF Notes	This data is released about a week later than Existing Home Sales, but it's more forward-looking as a contract is signed several weeks before the home is counted as sold;
Why Traders Care	It's a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect. For example, renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction;
Also Called	Pending Resales;