'COMEX' Commodity Technical Outlook

SILVER

Silver edged lower overnight to open at 19.41/19.46. It declined to a low of 18.72/18.77 and then spiked to a high of 19.82/19.87 on thinly traded volumes before concluding the session at 19.36/19.41.

Silver had a rough day trading to fresh 6 month lows toward 18.75 before bouncing to close at 19.39. Silver has fallen 36% YOY and still looks like risk is toward our 2013 low of 18.26. The ability to hold this level will be key moving forward as a break opens the 2010 low of 14.68. 

The gold-silver ratio is closing at 61.93. We would expect the 60.00 to 64.00 range to hold for the near future.

Silver yesterday settled flat at 43876 as major exchanges where closed yesterday on New Year holiday

The Conference Board reported earlier that its index of U.S. consumer confidence improved to 78.1 in December from 72.0 in November

The Fed has rolled out multiple rounds of bond purchase since the 2008 financial crisis.

Technical Levels

	S 1	S 2	R 1	R 2
SILVER	19.32	19.03	20.41	20.99

Commodity Contract  S2 S1 R1 R2

GOLD 

Gold moved lower overnight to open at 1196.50/1197.50. It declined to a low of 1182.00/1183.00 while global equities traded near 6-year highs as investors moved away from safe-haven assets on expectations of a strong economic recovery in 2014 and rising benchmark bond yields combined with rising consumer confidence in the U.S. The metal then rose to a session high of 1214.00/1215.00 on low year-end volumes as the Euro appreciated against the Dollar. Thereafter, it traded within range for the rest of the afternoon to finally close at 1203.00/1204.00.

Gold is closing today largely unchanged from yesterday despite having a large range. The metal took a run at the 2013 lows today but fell $2 short at 1182. The failure trade resulted in a $30 bounce to 1213. It has been a bad year for Gold falling -28% YOY. This is the first down year after 12 consecutive years of gains. From a price perspective, the down side in the metal remains vulnerable with $1,087 the 50% of our 12 year range the next massive support.

Gold settled flat at 28418 as all major exchanges in all regions where closed for the New Year.

Gold tumbled in 2013, with Fed’s plan to step away from ultra-loose monetary policy undermining the investor rationale for holding bullion.

Investors had largely shrugged off industry data revealing that the Chicago purchasing managers’ index fell to a seasonally adjusted 59.1.

Technical Levels

	S1	S 2	R 1	R2
GOLD	1192	1181	1231	1249

Commodity Contract S2 S1 R1 R2

COPPER 

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.384 a pound during European morning trade, up 0.05%. Comex copper prices traded in a range between USD3.376 a pound and USD3.391 a pound.

Copper prices were likely to find support at USD3.368 a pound, the low from December 26 and resistance at USD3.431 a pound, the high from December 24. The March contract settled 0.07% lower on Monday to end at USD3.382 a pound.

Market players looked ahead to U.S. data on consumer confidence and manufacturing activity in the Chicago region later in the day, to gauge if the U.S. economy will be strong enough to allow the Fed to continue withdrawing support through 2014.

Copper futures were little changed on the final trading day of the year on Tuesday, with volumes expected to remain light as many investors already closed books before the end of the year.

Copper settled flat as trading was light as there was no major news and most investors were celebrating the New Year.

Growth in China’s factories slowed slightly in December as export orders and output weakened, official data showed

Dallas Fed service sector index rose to 12.5 in December, but December Chicago PMI was 59.1, falling more sharply than market expectations.

Technical Levels

	S1	S 2	R 1	R 2
COPPER	3.3726	3.3488	3.4141	3.4318

Commodity Contract S2 S1 R1 R2

CRUDE 

On the New York Mercantile Exchange, crude oil futures for February delivery rose by 0.31% while trading at USD 98.73 a barrel.
It earlier traded at a session high USD 98.77 a barrel. Crude oil was likely to find support at USD 99.06 and resistance at USD100.75.

Expectations for Libyan oil exports to resume to near normal levels sent prices falling Tuesday due to the added supply they'd bring to the global market.
Libyan oil operations faced glitches recently due to protesters disrupting production at various oilfields.Expectations for increased exports from South Sudan also nudged prices lower.
Trading volumes were thin as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.

Crude oil futures were higher during the Asian session on Thursday to start the New Year with exports from Libya a continued focus along with strife in South Sudan.

Crude oil nudged higher recovering some losses despite signs the Chinese economy lost some steam late last year.

Bumpy progress on resuming oil production in war-disrupted regions of Africa and the Middle East has been a recent factor in trading.

Crude oil inventories will release on Friday at 9.30pm as US market was closed on Wednesday. Expected inventory is -2.3M.

Technical Levels

	S 1	S 2	R 1	R 2
CRUDE	97.91	96.67	99.89	100.39

Commodity Contract S2 S1 R1 R2
Global Economic Data

TIME	DATA	PRV	EXP	IMPACT
7.00P.M	Unemployment Claims	338K	334K	STRONG
7.00P.M	ISM Manufacturing PMI	57.3	56.8	STRONG

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	Jan 9, 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;

ISM Manufacturing PMI

Source	Institute for Supply Management (latest release)
Measures	Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry;
Usual Effect	Actual > Forecast = Good for currency;
Frequency	Released monthly, on the first business day after the month ends;
Next Release	Feb 3, 2014
FF Notes	Above 50.0 indicates industry 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 about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;
Also Called	Manufacturing ISM Report On Business;
Acro Expand	The Institute for Supply Management (ISM), Purchasing Managers' Index (PMI);