GOLD
Gold edged slightly higher overnight to open at 1313.50/1314.50, which
was also the intraday high. Following the open it dipped to a low of
1300.25/1301.25 as the dollar strengthened and equities gained momentum
following better-than-expected U.S. economic data that showed an
increase in sales of durable goods. The slide in gold prices was also
attributed to easing of tensions between Russia and the West, which
suppressed demand for safe haven assets. The metal closed the day at
1302.50/1303.50.
Gold traded lower today, closing at 1302 and coming dangerously close to
the 200-day moving average at 1296. A close below that level would be
our stop-loss on our long-term bullish gold view. Resistance is at
1316/17, the high of the past two sessions.
Gold fell as encouraging U.S. manufacturing data reduced bullion’s
appeal to institutional investors as a hedge against economic
uncertainty
U.S. Federal Janet Yellen suggested interest rates could rise in the
first half of 2015, raised the opportunity cost of holding non-yielding
bullion.
SPDR gold trust holding dropped by 1.80 tonnes i.e. 0.22% to 816.97 tonnes from 818.77 tonnes.
SILVER
Silver was mostly unchanged overnight, opening at 19.97/20.02. It
briefly climbed to a high of 20.01/20.06 before retreating on the back
of gold to a low of 19.73/19.78, prior to concluding the session below
the $20 mark at 19.76/19.81.
Silver had a bearish close today, closing lower at 19.76. We are bearish
silver, looking for a test of the base of the consolidation that has
been in place since early December, around the 18.83 low.
The gold-silver ratio is trading higher today
at 65.90. There is support at 65.02, the 76.4% retracement of the last
downtrend in the ratio from 67.47 high to 57.09 low. Uptrend support
comes in at 62.99. We are bullish the ratio, targeting a test of the
double top in the 67.50 area.
Silver prices dropped after official data showed that U.S. orders for
long lasting manufactured goods came in higher-than-forecast in
February.
Prices has been under heavy selling pressure amid growing expectations
that the Federal Reserve will raise interest rates sooner than expected.
The Commerce Department reported that U.S. durable goods orders rose
2.2% last month, snapping two months of declines and surpassing
expectations for a 1% increase.
COPPER
On the Comex division of the New York Mercantile Exchange, copper
futures for May delivery fell to a session low of $2.982 a pound, before
trimming losses to last trade at $2.985 during European morning hours,
down 0.68%, or 2.0 cents.
Copper rallied to $3.045 a pound on Tuesday, the most since March 11, before settling at $3.005 a pound, up 2.04%, or 6.0 cents.
Futures were likely to find support at $2.939 a pound, the low from
March 25 and resistance at $3.045 a pound, the high from March 25.
The U.S. is to release data on durable goods orders later in the session.
Data on Tuesday showed that U.S. consumer confidence improved more than
expected in March. However, a separate report said that new home sales
fell by the most in five months in February, indicating continued
weakness in the housing sector.
Copper rallied on Tuesday amid growing hopes that China will unveil fresh stimulus measures to boost slowing economic growth.
Data released on Monday showed that Chinese manufacturing activity deteriorated for a third successive month in March.
The industrial metal fell to $2.877 a pound on March 19, the lowest
since July 2010, amid growing concerns over the health of China’s
economy.
Copper prices fell from the previous session’s two-week high on
Wednesday, as investors looked ahead to key U.S. economic data later in
the day for further indications on the strength of the economy and the
future course of monetary policy.
CRUDE
On the New York Mercantile Exchange, West Texas Intermediate crude oil
for delivery in May traded at $100.32 a barrel, up 0.05%, after hitting
an overnight session low of $99.11 a barrel and a high of $100.13 a
barrel.
Prices for the global Brent oil futures contract rose four cents to
settle at $107.03 a barrel on the ICE Futures Europe exchange on
Wednesday.
Overnight, oil prices firmed after the Commerce Department
reported that U.S. durable goods orders rose 2.2% in February, wiping
out two months of declines and surpassing expectations for a 1.0%
increase.
Core durable goods orders, which exclude transportation items, inched up 0.2%, slightly below forecasts for a 0.3% gain.
The numbers fueled expectations for a more sustained pickup in the U.S.
economy, which should hike demand for more fuel and energy.
Weekly inventory data gave oil prices a boost as well.
The U.S. Energy Information Administration said in its weekly report
that U.S. crude oil inventories rose by 6.6 million barrels in the week
ended March 21, above expectations for an increase of 2.8 million
barrels.
The EIA also reported a 1.3 million barrel draw at a delivery point in
Cushing, Oklahoma, which was larger expected and eclipsed the otherwise
bearish 6.6 million-barrel build.
Total U.S. crude oil inventories stood at 382.5 million barrels as of last week.
Crude oil prices edged slightly higher in Asia on Thursday from a
morning drop that followed overnight gains on better-than-expected
reports on U.S. durable goods and oil inventories.
Technical Levels
|
SUPPORT 1 |
SUPPORT 2 |
RESISTANCE 1 |
RESISTANCE 2 |
| GOLD |
1296 |
1288 |
1314 |
1324 |
| SILVER |
19.67 |
19.59 |
20.08 |
20.16 |
| COPPER |
2.9930 |
2.9755 |
3.0380 |
3.0830 |
| CRUDE |
99.42 |
98.58 |
100.78 |
101.30 |
Global Economic Data
| TIME :IST |
DATA |
PRV |
EXP |
IMPACT |
| 6.00P.M |
Unemployment Claims |
320k |
326k |
STRONG |
| 6.00P.M |
FOMC Member Pianalto Speaks |
— |
— |
MEDIUM |
| 6.00P.M |
Final GDP q/q |
2.4% |
2.7% |
MEDIUM |
| 7.30P.M |
Pending Home Sales m/m |
0.1% |
0.1% |
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 |
Apr 3, 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; |
Final 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 90 days after the quarter ends; |
| Next Release |
Jun 25, 2014 |
| FF Notes |
While this is q/q data, it’s reported in an annualized
format (quarterly change x4). The ‘Previous’ listed is the ‘Actual’ from
the Preliminary release and therefore the ‘History’ data will appear
unconnected. 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; |
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 |
Apr 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; |
| Source |
National Association of Realtors (latest release) |
6:16 PM
Alex Gray
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