GOLD
Gold remained relatively unchanged overnight, opening at the
intraday high of 1332.75/1333.75. It declined steadily as a string of
mostly positive U.S. economic data showed a rise in pending home sales
and consumer spending. The S&P hit a record high as the metal
continued its decline to close at the day’s low of 1320.50/1321.50.
After the close, the metal moved higher following news that Russia
landed troops at a military air base in Ukraine.
Gold closed slightly lower this week at
1321, after three successive weeks
higher. The weekly chart looks bullish, having formed a bottom at 1182
in December, and reaching an intra week high in the 1345 area. Support
is at 1301-1308, which forms a Fibonacci convergence zone. The Fibonacci
levels represent the 50% retracement of the 2008 to 2011 uptrend and
the 50% retracement of the September to December downtrend (at 1308).
Resistance is at 1361, the high from November 2013. RSI is confirming
the trend higher, and the last signal in MACD in the weekly chart was a
buy. Lastly, the Positive Directional Movement Index (DMI) line crossed
bullishly through the Negative DMI line.
Gold settled flat as U.S. equities climbed, but yellow metal still
posted monthly gain as persistent concerns about a slowdown in the U.S.
economy boosted prices.
Data showed the U.S. government slashed its estimate for
fourth-quarter economic growth in the latest sign of a loss of momentum
Gold gained in February mostly due to signs of economic weakness
in China and the United States as well as political and economic turmoil
in Ukraine.
SILVER
Silver opened at the session high of 21.36/21.41, remaining mostly
unchanged overnight. It followed gold’s decline to close at the session
low of 21.20/21.25.
Silver
closed lower at 21.20, after three up weeks. There is a downtrend off
the April 2011 high, which currently comes in at 22.33. RSI also failed
just above resistance in the 53 area, currently at 50.78. We will need
to see a break up through 22.33 to attract more buyers. Support is at
the lows of the recent consolidation in the 18.80 level.
The
gold-silver
ratio is trading higher this week at 62.53, after making a false break
lower through its trend line last week. The new, re-drawn uptrend
currently comes in at 61.37. Resistance is at the recent high of 65.24.
Silver settled down after Federal Reserve Chairwoman Janet Yellen
said the bank will continue tapering its monthly bond purchases
Prices seen pressure with investors opting for the riskier equity
assets after a couple of encouraging economic data from the U.S. with
consumer sentiment rising
Report showed the U.S. economy to have grown much less than initially indicated in the fourth quarter of 2013.
COPPER
Copper
settled down -0.55% as lingering concerns over the health of China’s
economy and a weakening Chinese Yuan dampened sentiment. Investors were
pondering improvement in the consumer confidence index and government
officials’ remarks on the Ukraine crisis.
The
US Commerce Department announced Friday that the 4Q GDP growth for the
country was revised to 2.4% QoQ, lower than estimate and Q3’s growth.
The figure raised speculations that the Fed may possibly suspend QE
taper. In the euro zone, inflation remained stable, cooling expectation
for monetary easing by the European Central Bank.
In this context, the US dollar index fell to 79.772, help LME
copper prices pare declines and finish at USD 7,012.3/mt, down USD
18.5/mt. In the US, GDP growth for Q4 2013 was revised down to 2.4%,
missing the 2.5% forecast.
In other vital news, political crisis in Ukraine continued to
upgrade. Russia’s parliament has approved President Vladimir Putin’s
request for Russian forces to be used in Ukraine “until the
normalisation of the political situation in the country”.
US President Barack Obama warned Russia that it should rethink its
military intervention in Ukraine, and US government officials said
Obama is considering not attending June’s G8 Summit in Sochi, Russia,
and reassessing economic relations between US and Russia. In the week
ahead, investors will be anticipating Friday’s U.S. nonfarm payrolls
report for an indication of the strength of the recovery in the labor
market and the future course of monetary policy.
CRUDE
On the
New York Mercantile Exchange,
light sweet crude futures for delivery in April traded at 103.77, up
1.15%, on the risk of military conflict in the Ukraine and possibility
of continued cold weather in the United States.
Last week, crude futures for April settled up 0.19%, or $0.19 cents, to end the week at $102.59 a barrel.
Oil’s gains came as the U.S. dollar fell to a three-month low
against the euro on Friday after data showed that the annual rate of
consumer inflation in the euro zone rose by a more-than-expected 0.8% in
February, dampening speculation the European Central Bank will add to
stimulus at its upcoming policy meeting.
Meanwhile, forecasts for freezing temperatures across most parts
of the central and northeast U.S. over the next couple of weeks boosted
prices as well.
Gains last week however were limited after the Commerce Department
reported Friday that U.S. fourth quarter gross domestic product was
revised down to an annual rate of 2.4%, from a preliminary estimate of
3.2%. Analysts had expected a downward revision to 2.5%.
The disappointing data added to concerns that the economic recovery has lost momentum since the end of last year.
Earlier in the week, Fed Chair Janet Yellen acknowledged recent
weakness in U.S. data, saying it indicates softness in the economy.
Crude oil prices gained in Asian trade on Monday as tension between Russia and the West over the Ukraine lifted risk assets broadly.
Technical
Levels
|
SUPPORT
1
|
SUPPORT
2
|
RESISTANCE
1
|
RESISTANCE
2
|
GOLD
|
1316
|
1318
|
1345
|
1354
|
SILVER
|
21.03
|
20.76
|
21.54
|
21.69
|
COPPER
|
3.2253
|
3.2121
|
3.2528
|
3.2670
|
CRUDE
|
101.94
|
101.29
|
103.10
|
104.26
|
Global
Economic DataTIME
:IST
|
DATA
|
PRV
|
EXP
|
IMPACT
|
7.00P.M
|
Core
PCE Price Index m/m
|
0.1%
|
0.1%
|
MEDIUM
|
7.00P.M
|
Personal
Spending m/m
|
0.4%
|
0.2%
|
MEDIUM
|
8.30P.M
|
ISM
Manufacturing PMI
|
51.3
|
52.3
|
STRONG
|
Core
PCE Price Index m/m
| Source |
Bureau
of Economic Analysis(latest release) |
| Measures |
Change
in the price of goods and services purchased by consumers,
excluding food and energy; |
| Usual
Effect |
Actual
> Forecast = Good for currency; |
| Frequency |
Released
monthly, about 30 days after the month ends; |
| Next
Release |
Mar
28, 2014 |
| FF
Notes |
Differs
from Core CPI in that it only measures goods and services targeted
towards and consumed by individuals. Prices are weighted according
to total expenditure per item which gives important insights into
consumer spending behavior. This is rumored to be the Federal
Reserve's favorite inflation measure, but CPI is released about 15
days earlier and tends to garner most of the attention; |
| Acro
Expand |
Personal
Consumption Expenditures (PCE), Consumer Price Index (CPI); |
| Source |
Bureau
of Economic Analysis(latest release) |
| Measures |
Change
in the price of goods and services purchased by consumers,
excluding food and energy; |
Personal
Spending m/m
Source
|
Bureau
of Economic Analysis(latest release) |
Measures
|
Change
in the inflation-adjusted value of all expenditures by consumers;
|
Usual
Effect
|
Actual
> Forecast = Good for currency;
|
Frequency
|
Released
monthly, about 30 days after the month ends;
|
Next
Release
|
Mar
28, 2014 |
FF
Notes
|
This
is significant data, though it tends to have a relatively mild
impact because Retail Sales, which also covers consumer spending,
is released about 2 weeks earlier;
|
Why
Traders
Care
|
Consumer
spending accounts for a majority of overall economic activity.
It's one of the most important gauges of economic health due to
the vast ripple effect consumer buying creates in the economy;
|
Also
Called
|
Consumer
Spending, Personal Consumption Expenditures;
|
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
|
Apr
1, 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);
|
8:40 PM
Alex Gray
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