Comex High Grade Copper Futures Technical Analysis – August 30, 2013 Forecast

The weak close in December High Grade Copper is giving the market a downside bias today. Not only did the main trend turn down on the move through 3.2925, but it also closed below a major uptrending Gann angle. Both are strong signs the selling is greater than the buying at current price levels.

Fundamentally, the market is taking all of its direction from the U.S. Dollar. Yesterday’s better-than-expected estimated GDP report sent the dollar higher and copper lower as it signaled the Fed would likely begin reducing its monetary stimulus as early as September.

Although trading conditions are expected to be thin today due to Monday’s U.S. holiday, U.S. Dollar and copper traders will get the opportunity to react to reports on personal income and spending as well as Chicago PMI and University of Michigan consumer sentiment. Barring substantially lower than expected numbers, these reports are expected to come out steady which may be enough to trigger a rally in the dollar and a break in copper.

Daily December High Grade Copper
Daily December High Grade Copper

Technically, the market is opening on the weak side of a downtrending Gann angle at 3.2835 today. The resistance angle that has been guiding the market lower for the past three sessions comes in at 3.3150.

Based on the main range of 3.0535 to 3.3950, the first likely downside target is a 50% level at 3.2243. If downside momentum is strong enough then look for a further decline into the Fibonacci level at 3.1840.

With the market in a downtrend and the dollar starting to show strength, any short-covering rallies are likely to be met with renewed selling pressure. 

Gold & Silver Ease After The UK Votes Down Military Action

Gold & Silver Ease After The UK Votes Down Military Action
Gold & Silver Ease After The UK Votes Down Military Action
As traders relax a bit today and risk off trades back off, gold has dropped $3.50 in the Asian session. Gold eased on Thursday from a five-day rally that had propelled the metal to its highest since mid-May, losing some of its safe-haven urgency as US military strikes against Syria didn’t seem imminent and investors booked profit. Just a short while ago UK lawmakers voted against military intervention in Syria leaving the US alone. Just days before the UN Security Council vetoed military action.  The United States and its allies have been discussing possible military action against Syria for last week’s deadly chemical attack, stoking buying interest in gold and pushing it above $1,400 an ounce for the first time since early June. But US President Barack Obama said on Wednesday any strike would be “tailored, limited,” even as he faced new obstacles with allies and lawmakers that could delay any immediate action.

News from India this morning surprised investors after the rupee tumble. The rupee is down over 25% this year and is seeing prices soar in the nation. This week the Bank of India introduced emergency measures to stop the slide of the currency. India is considering a radical plan to direct commercial banks to buy gold from ordinary citizens and divert it to precious metal refiners in an attempt to curb imports and take some heat off the plunging currency. A pilot project will be launched soon, a source familiar with the Reserve Bank of India’s (RBI) plan told Reuters, although the idea was met with some skepticism. India has the world’s third-largest current account deficit, which is approaching nearly $90 billion, driven in a large part by appetite for gold imports in the world’s biggest consumer of the metal. That has played a major role in driving the rupee to a record low according to Miniweb.

Gold prices fell after stronger than expected US GDP growth which came at 2.5% and lesser unemployment claims strengthened fears of Fed tapering the bond buying program soon and hurt gold’s inflation hedge appeal. Gold prices are expected to move down as a stronger dollar on fears of stimulus withdrawal by Fed and easing geopolitical tensions can hurt gold prices.

As precious metals eased silver prices dipped into the $23 range, just days after it was headed above the $25 level. Silver is trading at 23.953 down over 18 cents this morning. Industrial metals prices fell to the lowest price in three weeks as gains in the U.S. dollar and concern about potential military escalation in Syria pushed investors to cash out. Copper prices fell on Thursday as a stronger dollar after higher than expected US GDP growth raised fears of stimulus withdrawal by Fed and hurt prices. Threats of strike by workers over pay at the world’s top copper mine Escondia in Chile and at Codelco’s Salvador mine limited the downside in prices. Japan’s Manufacturing PMI came at 52.2 while industrial production rose to 3.2%. Base metals are expected to move up as strong global economic recovery and supply concerns over strike threats at mines are likely to push prices higher.

 

 

Comex High Grade Copper Futures Technical Analysis – August 29, 2013 Forecast

The current sideways action in December High Grade Copper suggests impending volatility. Based on Wednesday’s action, the market should begin with a bias to the downside. In addition, the closing price reversal top from earlier in the week is also exerting potentially bearish pressure.

The key number to watch is 3.2925. A trade through this level will turn the main trend to down and could trigger an acceleration to the downside. The first target is an uptrending Gann angle at 3.2635, however the bigger picture suggests this market should eventually retrace to 3.2243 – 3.1840.

Daily December High Grade Copper
Daily December High Grade Copper

Although the impending attack of Syria by the U.S. stopped the rally earlier in the week, the action in the U.S. Dollar today could exert a strong influence on price activity. Traders should watch the action in the Greenback following the release of the latest U.S. Weekly Jobless Claims report and GDP estimate because these reports may influence the Fed’s decision to begin tapering its current monetary stimulus.

Better-than-expected data could fuel a rally in the U.S. Dollar, putting pressure on the dollar-denominated copper market. Additionally, traders are also expressing some worry that an attack on Syria by the U.S. will lead to China’s involvement and this may hurt demand in the future.

Look for an expanded range and high volatility if 3.2925 fails. Once this area goes, sell stops and fresh shorting pressure should trigger an acceleration to the downside especially if combined with a corresponding rally in the U.S. Dollar. 

As War Talk Eases So Does Gold & Silver

As War Talk Eases So Does Gold & Silver
As War Talk Eases So Does Gold & Silver
Gold retreated in the Asian session following cues from late US trading. Gold is down $9.50 this morning trading at 1409.30. Gold prices were trading higher amid a rise in investment demand as holdings in SPDR Gold Trust increased to 921.03 tonnes from 920.13 tons yesterday. However, a stronger dollar weighed on losses and capped the upside. Meanwhile, markets await US GDP data due today for further cues on the Fed’s asset purchase program. With holiday thinned trading as the US begins its Labor Day Weekend holiday and Europeans end their summer vacation season volume is expected to be thinned and will remain sensitive to the geopolitical situation and less in tune to the GDP numbers. Traders a trying to decide if a US or UN air strike against Syria is imminent and will this take place before the FOMC meeting in September. The US Dollar resumed its safe-haven status role on Wednesday vs the US Dollar after investors sought safety in the liquid greenback amid growing expectations that the U.S. is poised to launch military strikes against Syria for the latter’s alleged use of chemical weapons. The greenback is trading at 81.44 flat in morning trading. The dollar held near a four-week high against a basket of its peers before U.S. data forecast to show the economy grew faster than initially estimated, adding to the case for the Federal Reserve to slow monetary stimulus.

Late yesterday a UN resolution was unable to pass due to the objections of Russia, as expected. Global equity markets have been hit hard in recent days as fears of a U.S.-led military intervention in the country in the country heightened after allegations the government of Bashar al-Assad used chemical weapons against opposition rebels. U.S. Secretary of State John Kerry said late Monday that there could be little doubt about the use of chemical weapons by forces loyal to the Syrian government, calling the action “inexcusable.” It looks imminent that a US-UK attack is in the making. At the same time Assad claims if attacked he would retaliate against Israel.

Copper futures edged lower on Wednesday, as escalating geopolitical tensions between the U.S. and Syria continued to weigh on appetite for riskier assets. On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.326 a pound during European morning trade, down 0.3%. Copper is trading at 3.305 down 13 pips this morning. China’s government has tried to reassure companies and its public about the economy’s health, saying growth is stabilizing after a lengthy decline and should hit the official target of 7.5 per cent for the year. The announcement by the chief spokesman for the Cabinet’s statistics agency was part of official efforts to defuse unease about the country’s deepest slump since the 2008 global crisis. “There are growing signs of stabilization and also of further growth,” said the spokesman, Sheng Laiyun, at a news briefing. “We are confident we can hit our full-year growth target.” according to Business Spectator. Silver eased off its highs close to the $25 price level to trade in the red this morning at 24.193 falling close to 80 cents in just two days.

 

 

 

Comex High Grade Copper Futures Technical Analysis – August 28, 2013 Forecast

December High Grade Copper futures posted an inside move on Tuesday, indicating trader indecision and impending volatility. After posting a closing price reversal top on the daily chart the previous day, the market was ripe for a sell-off, but sellers failed to confirm the chart pattern with a drive through 3.3030. Once this chart pattern is confirmed, the market could start a 2 to 3 day correction. The first downside target is typically a retracement of the last rally. This makes 3.2243 to 3.1840 a potential downside target.

Besides the closing price reversal top, the market could also change the main trend to down on a trade through the swing bottom at 3.2925. This move will also signal a shift in sentiment to the downside. In addition to the retracement zone, an uptrending Gann angle at 3.2640 is another potential downside target.

Daily December High Grade Copper
Daily December High Grade Copper

The fundamentals are mixed. The recent strength in China and the Euro Zone helped spur a strong rally, but investors are still a little tentative about chasing the market higher because of the possibility the Fed will begin tapering in September. This move would likely strengthen the U.S. Dollar, making dollar- denominated copper less desirable.

The possibility of an attack of Syria by the U.S. was through into the mix this week. Investors dumped higher-yielding assets on Tuesday in favor of less risky investments. This move may continue today although the overnight action suggests otherwise.

Look for increased volatility today and the possibility of a wash-out to the downside if the main bottom at 3.2925 is taken out with conviction. 

Markets Shift To Risk Off Mode Pushing Gold Higher

Markets Shift To Risk Off Mode Pushing Gold Higher
Markets Shift To Risk Off Mode Pushing Gold Higher

There were three factors weighing on the markets today. These were concerns of military action in Syria, political uncertainty in Italy and tapering concerns in the U.S. There are so many reasons not to get involved in the markets that compounded with the European vacation season at its height and the US long summer weekend most traders are just moving to the sidelines. If you’re an investor you are either going to sit it out or take money off the table or move to safety. Risk off mode seems to dominate the markets with gold soaring to trade above the 1420 price on Tuesday. Gold saw a gain of over $25 as traders moved to safe havens and gold has been the favorite of traders. The US dollar has stabilized at 81.21 while crude oil continues to climb to trade at 111.70. The yen held its biggest gains in 2 1/2 months against the dollar and euro as traders sought haven investments amid escalating tension in Syria. Japan’s currency reached its strongest level in two weeks against the greenback, and the Swiss franc touched the highest in a week

U.S. markets also traded lower and most Asian markets slid this morning, amid worries over the recent escalation of the Syrian crisis. U.S. Secretary of State John Kerry said late Monday that there can be no doubt Bashar al-Assad’s government used chemical weapons against rebels, calling the action “inexcusable.” Syria’s decision to allow United Nations inspectors came too late, and U.S. President Barack Obama will now decide how to respond, Kerry said.

Gold climbed to highest since May as political tension over Syria increased demand for precious metal as a store of value. Silver also benefited from the demand for precious metals to climb to trade at 24.70 climbing steadily since the beginning of the week. Taking cues from rise in gold prices along with weakness in the DX, silver prices rose around 0.8 percent yesterday. Additionally favorable economic data from US and Euro Zone supported an upside in prices. Industrial metals prices fell yesterday on international bourses as signals of stabilization in top consumer China were offset by worries over the potential tapering of the U.S. stimulus program, while a potential western strike on Syria made investor bets more cautious. Copper lost 0.6 percent on the LME due to weak market sentiments. Additionally, increase in inventories by more than 2 percent exerted downside pressure on prices. Copper is trading at 3.341 gaining 9 points this morning. Venezuela is hiking prices for its metals and minerals exports in an effort to obtain a “fair price” from buyers, but traders warned the move could leave the OPEC nation without buyers for its most important non-oil exports.

Widespread Opportunities Opening Up for Speculators in This Mining Sector

Gold prices have bounced back, jumping above $1,350 an ounce; but I contend that the advance will not be sustainable as the metal remains in a bear market.

The problem we are seeing is that the mining sector is under duress, especially the junior miners who are struggling to maintain costs while gold prices and demand decline.

With commodity prices down across the board, Glencore Xstrata Plc wrote down its mining assets by $7.66 billion in the first six months of 2013. The company, which trades on the London stock exchange, attributed the massive writedown to weak commodity prices.

While commodity prices are weak at this juncture, I continue to see some opportunities in the mining companies and junior gold miners.

China has also been buying mining companies around the world in an effort to increase its reserves. This is one reason why I like some of the smaller mining companies, especially those with a massive reserve of proven metals in the ground, just waiting to be developed but needing a cash-rich partner to get the ore out of the ground.

In fact, it often makes sense to buy a sector when no one else wants to buy it. In this way, you pay lower prices, rather than chasing a sector at a higher point. Gold, silver, and copper are good examples.

In the large-cap metals area, the top players are Freeport-McMoRan Copper & Gold Inc. (NYSE/FCX), Barrick Gold Corporation (NYSE/ABX, TSX/ABX), and Newmont Mining Corporation (NYSE/NEM). These stocks are close to their 52-week lows and pay a good dividend. The short-term may be volatile, but you know that there’s always a place for these stocks in your portfolio. Yet, if you are looking for higher-risk opportunities, take a look at some of the smaller miners.

Here are some examples of small mining stocks that may be worth a look for the speculator:

Asanko Gold Inc. (TSX/KGN) runs the 210-square-kilometer Esaase Project in southwest Ghana. Asanko is an aggressive small-cap mining stock with high price appreciation potential.

Another beaten-up junior mining stock is Canada-based Taseko Mines Limited (NYSE/TGB, TSX/TKO). The company mines for copper and gold in Canada. Taseko has good growth metrics, makes money, and is an above-average price appreciation play, trading at 8.67X its estimated 2014 earnings per share (EPS) of $0.24.

An excellent junior mining stock with great valuation and growth metrics is Nevsun Resources Ltd. (NYSE/NSU, TSX/NSU). The company is expected to grow its revenues by 129.2% to $625 million and earn $0.55 per diluted share in 2014, according to Thomson Financial. Trading at 6.15X its 2014 EPS, Nevsun has excellent potential.

Finally, if you are looking for an interesting non-precious metal play, a company like Thompson Creek Metals Company Inc. (NYSE/TC, TSX/TCM) may be worth a look. This company mines for molybdenum—a metal used for creating stainless steel and other applications, including the production of rare earth used in electronics.

This article Widespread Opportunities Opening Up for Speculators in This Mining Sector was originally p0ublished at Investment Contrarians

Comex High Grade Copper Futures Technical Analysis – August 27, 2013 Forecast

December High Grade Copper futures are expected to open lower based on the overnight trade. Investors are selling higher risk assets and moving money into cash equivalents or lower-yielding assets. The catalyst behind the weakness is the possibility of war breaking out between Syria and the U.S.

Technically, the market posted a potentially bearish closing price reversal top on Monday. A trade through the recent bottom at 3.2925 will not only confirm the chart pattern, but it will also change the main trend to down on the daily chart.

Daily December High Grade Copper
Daily December High Grade Copper

The first downside objective is an uptrending Gann angle from the 3.0535 bottom at 3.2533 today. Taking out this angle could trigger an acceleration to the downside with a major retracement zone at 3.2243 to 3.1840 the next likely downside target.

The move from higher risk assets could continue throughout the week as long as the uncertainty about the war exists. Traders would rather book profits after a solid rally then wait for any action to take place. Furthermore, since China and Russia are allies with Syria, investors feel this may hurt demand for copper if it turns into a long-term skirmish.

Traders should look for increased volatility throughout the day with a strong bias to the downside. The key number to watch is 3.2925. A break through this price could trigger sell stops as well as attracting fresh shorting pressure.  

Safe Haven Trades and Lackluster US Eco Data Push Gold Over $1400

gold  bnsnlaGold is trading at 1398.00 this morning gaining $4.90 as traders seek safety after the US turned up the heat on Syria. Gold prices eased on Monday from an 11-week high above $1,400 an ounce hit overnight in Asia, as uncertainty over the outlook for US monetary policy and a slightly firmer tone to the dollar kept the metal in check.  Weak US data and news that the world’s biggest gold-backed exchange traded fund had seen its biggest one-day inflow this year supported an early rally in bullion, with a breach of key chart levels sparking a jump to $1,406.01, its highest since June 7.

However, it quickly retreated to trade little changed from Friday, after the technically-driven rally ran out of steam.

Prices had also advanced on Friday after US officials said they had evidence of the use of chemical weapons by forces backing Syrian leader Bashar al-Assad and signaled that Washington could begin arming the opposition. “The decision of the US to supply arms to the rebels in Syria threatens finally to turn the civil war in Syria into a proxy war between the world powers, given that Russia is providing military support to the Assad regime,” Commerzbank analyst Carsten Fritsch said. US president Barack Obama and world leaders have arrived in Northern Ireland looking to put pressure on Russia to back away from its support of Mr Assad.

The dollar fell against the euro on Monday after much weaker-than-expected US durable goods data last month raised doubts about an early withdrawal of stimulus by the Federal Reserve. The soft report also suggested that any rollback in the Fed’s asset-buying plan, if it does happen, would be incremental at best, which could weigh on a dollar that has been buoyant so far this year.

Stocks slumped Monday afternoon and buyers moved into bonds, gold and oil, after Secretary of State John Kerry said the U.S. believes Syria used chemical weapons on its people, a “moral obscenity.” Kerry said President Barack Obama believes there must be accountability for chemical weapons use, and the U.S. is reviewing the situation with its partners. Gold prices began to rise while Kerry was speaking, and crossed above $1400 in late trading. Earlier in the day, gold touched $1400 for the first time in 11 weeks.

Industrial metals prices slipped yesterday on technical selling after prices neared a three-month high and as weaker-than-expected U.S. durable goods data renewed concerns about the health of the world’s biggest economy. Copper remains in the green trading at 3.343 while silver has gained 9 cents this morning to trade at 24.145. China’s government has tried to reassure companies and its public about the economy’s health, saying growth is stabilizing after a lengthy decline and should hit the official target of 7.5 per cent for the year. The announcement by the chief spokesman for the Cabinet’s statistics agency was part of official efforts to defuse unease about the country’s deepest slump since the 2008 global crisis.

Comex High Grade Copper Futures Technical Analysis – August 26, 2013 Forecast

December High Grade Copper futures are trading higher overnight ahead of this morning’s U.S. Durable Goods report. The market continues to post strong gains despite uncertainty about the timing of the Fed’s plan to begin tapering its $85 billion monthly bond purchases. Today’s Durable Goods report which is expected to show a rise from =0.1% to 0.6%, could move the market.

On Friday, copper prices surged after the Commerce Department reported a drop in new home sales by 13.4%. Analysts had been looking for new home sales to show a 2% decline. The week showing encouraged investors to buy copper because it fueled speculation the Fed would refrain from reducing stimulus in September.

Daily December High Grade Copper
Daily December High Grade Copper

Last week, the Fed minutes from the July meeting said the economy was “mixed”, indicating the central bank members would like to see more consistency and stronger growth before beginning the tapering of monetary stimulus.

Friendly manufacturing news from China also contributed to last week’s strong surge. Traders bought copper on the possibility of greater demand.

Although the U.S. Dollar strengthened somewhat last week and is indicating a possible bottom, it has had almost no effect on copper prices. Since copper is dollar-denominated, it would take a huge breakout to the upside by the Greenback to weaken the copper market. This would likely occur if the Fed was definitive about the start date of the reduction in its stimulus.

Technically, December High Grade Copper took out the last swing top at 3.3835, reaffirming the main uptrend and forming a new higher swing bottom at 3.2925. The next likely upside targets are a weekly 50% level at 3.4028, followed by the May top at 3.4305 and a Fibonacci level at 3.5012.

Key Gann angle support is at 3.3525 and 3.3225. A break through the first angle will be the first sign of weakness. Since the market is in a prolonged move up in terms of price and time, it is vulnerable to a possible closing price reversal top. 

Gold Silver & Copper All Trading In The Green

Gold Silver & Copper All Trading In The Green
Gold Silver & Copper All Trading In The Green
Federal Reserve officials rebuffed international calls to take the threat of fallout in emerging markets into account when tapering U.S. monetary stimulus. The risk that the Fed’s trimming of bond buying will hurt economies from India to Turkey by sparking an exodus of cash and higher borrowing costs was a dominant theme at the annual meeting of central bankers and economists in Jackson Hole. Although the Fed gave no indication as to if and when it would begin to taper its asset purchases. Gold is trading near a recent high at 1395.90 but flat this morning after the Jackson Hole summit saw little news.

Consumer spending probably rose for a third consecutive month in July as improvements in the housing and labor markets helped underpins the biggest part of the economy. Purchases of goods and services increased 0.3 percent last month after a 0.5 percent advance in June. Purchases of new U.S. homes plunged 13.4 percent in July; the most in more than three years, raising concern higher mortgage rates will slow the real-estate rebound. Sales fell to a 394,000 annualized pace, Commerce Department figures showed in Washington. Even though analysts are saying that the report will most likely see a huge revision at next month’s report, markets reacted immediately as the US dollar fell and gold soared.

Last week, gold and silver rose again. Their ongoing recovery resulted in gold reaching its highest level since early June; silver is at its highest since early May. Despite the recent rally of gold and silver, their recovery didn’t stem from the latest developments in the forex markets. The publication of the minutes of the previous FOMC meeting didn’t add more information behind the future move of the FOMC. The developments in the US are likely to keep influencing bullion investors. Later today traders will closely monitor the release of US durable goods data.

Silver climbed above the 24 price level to trade at 24.173 this morning gaining 39 cents while gold was flat this morning. Industrial metals prices rose on Friday as signs of re-emerging appetite for the metal in top consumer China boosted the demand outlook and helped offset concerns over a tapering of monetary stimulus in the United States. Hedge funds and money managers boosted bullish bets in futures and options in the gold, silver and copper markets as metal prices climbed across the board, a report by the Commodity Futures Trading Commission showed on Friday. Copper is trading at 3.383 gaining 26 pips this morning. Metals traders will be closely monitoring fundamental data this week which includes U.S core durable goods report, China manufacturing PMI,  U.S consumer confidence, Canada’s GDP, U.S’s GDP second quarter estimate, U.S pending home sales, German retail sales, and U.S. jobless claims.  

Comex High Grade Copper Futures Technical Analysis – August 23, 2013 Forecast

Improvements in Chinese manufacturing and the Euro Zone economy helped trigger a surge in September High Grade Copper on Thursday. The move however stopped short of the recent top at 3.3835, triggering a late session retracement. The market nonetheless remains in a position to challenge the top.

Technically, a new minor bottom was formed at 3.2925. A trade through this price will turn the main trend to down and could trigger a break into a retracement zone at 3.2185 to 3.1796. The first Gann angle resistance is 3.3710, followed by 3.3773. 

Daily September High Grade Copper
Daily September High Grade Copper

Despite the potential bullishness caused by the news from China earlier in the week, traders are still a little worried about when and by how much the Fed will begin tapering its monetary stimulus. As long as this worry is out there, investors may be hesitant about buying strength.

Today is an important day because Thursday’s sell-off as the market neared 3.3835 could have been a sign that the selling is greater than the buying at current price levels. A full recovery today will negate that thought and signal the presence of buyers. A sell-off today and a break through 3.2925 will be a bearish sign and could trigger an acceleration to the downside. 

Gold, Copper and Silver Rally On Strong PMI Reports

Gold, Copper and Silver Rally On Strong PMI Reports
Gold, Copper and Silver Rally On Strong PMI Reports
Gold swung between gains and losses as investors weighed expectations that the U.S. Fed Reserve will start to curb stimulus against increasing physical demand. Gold is trading at 1376.10 gaining $5.3 in the Asian session. Gold remains in a fairly tight range looking for direction as the Fed continue to leave traders confused. Traders are now watching US data closely ahead of the US nonfarm payroll release due in two weeks. Mr. Bernanke said that would not be attending the Jackson Hole summit this weekend, which means that traders should expect little news flow from the annual event. Bank of Japan Governor Kudora will be present and speculators are hoping for some indications of the banks moves ahead of its September meeting. Fed Reserve Bank of Dallas President Fisher said record Fed stimulus can’t revive U.S. manufacturers from a two-year slump caused by ambiguity in regulation and fiscal policy. “They have been given abundant, super-cheap monetary fuel needed to stoke up their production engines and expand their businesses,” Fisher said. “What is holding us back” is “fiscal and regulatory policy.”

Today, the markets will be keeping a close eye on the economic releases from Germany and the UK. The German GDP is expected to increase along with the private consumption and government spending, which should support gains in the euro and extend the gains in gold prices. The eurozone’s consumer confidence in the evening may also support the shared currency and an upside in gold prices. The United Kingdom’s GDP is also expected to improve, which would support gains in the pound against the dollar and lead to gains in gold prices. The US dollar is trading at 81.60 in the green this morning.

Industrial metals prices rose yesterday after manufacturing data for August from top metals consumer China suggested the world’s second biggest economy might be stabilizing and its demand for commodities could pick up. China’s HSBC/Markit flash August PMI rose back into expansionary territory to 50.1, well above consensus expectations of 48.2. This provides further evidence of stabilization in the Chinese economic backdrop and has helped support growth sensitive currencies, like AUD and CAD and commodity prices, copper is up 1.7% since yesterday’s close. Copper is trading at 3.337 up 5 points this morning after yesterday’s climb. Higher Germany and UK GDP along with positive US new home sales should remain favorable for international copper prices.

Silver climbed back into the $23 range trading this morning at 23.127 with a gain of 92 points as traders took advantage of positive precious metals and industrial metals to buy the metal. With stronger commercial demand and a rise in the appeal of precious metals, silver is enjoying a double header.

 

Comex High Grade Copper Futures Technical Analysis – August 22, 2013 Forecast

December High Grade Copper futures surged overnight after China reported better-than-expected manufacturing data. This morning’s upbeat HSBC Purchasing Manager’s index rebounded to a four-month high of 50.1, signaling that perhaps the economy had turned around after hovering on the brink of contraction just a few months ago. This report was closer to the official Chinese report which came in at 50.3 in July.

The news that business activity in the Euro Zone expanded at the fastest pace in over two years in August also supported the copper market. Traders believe a combination of economic growth in China and the Euro Zone will lead to increased demand for copper.

Daily September High Grade Copper
Daily September High Grade Copper

The sharp overnight rise in copper after yesterday’s Fed minutes serves as further proof that investors are more interested in fresh demand than the affect Fed tapering could have on prices at this time. Apparently, it is going to take a substantial rise in the Greenback to curtail foreign demand for copper.

Technically, the main trend is up on the daily chart. A new minor bottom was formed at 3.2925. The upside momentum indicates the market should challenge the last main top at 3.3835. This could trigger a further rally to the early June top at 3.4280. 

Comex High Grade Copper Futures Technical Analysis – August 21, 2013 Forecast

September High Grade Copper futures continued to fall on Wednesday as investors pared positions ahead of the release of today’s Fed minutes and tomorrow’s Chinese manufacturing data from HSBC Holdings.

Today’s Fed minutes will be watched carefully for clues from Fed officials as to when and by how much the central bank will begin reducing the amount of its monetary stimulus. Based on this week’s price action, it looks as if investors are looking for a September start date and the possibility of a $10 to $25 billion per month cut. Currently, the central bank is buying up to $85 billion of government bonds. Investors want to know how the Fed members feel about an early start date.

Daily September High Grade Copper
Daily September High Grade Copper

Copper investors are also expressing worries about the latest manufacturing data from China. Preliminary estimates are calling for a reading for August of 48.2, compared with 47.7 for last month. Levels below 50 signal shrinkage. Copper traders will be using this report to gauge future demand for copper.

Technically, after breaking a long-term uptrending angle with conviction, the market plunged to the downside. Since topping at 3.3800 on August 16, the market has been walking down a Gann angle moving .02 per day. This angle is at 3.3200 today. Taking out this angle with conviction could trigger a rally to 3.3500.

The daily chart indicates there is plenty of room to the downside. Based on the main range of 3.0365 to 3.3800, the first major downside target is a retracement zone at 3.2083 to 3.1677.

Traders should look for volatility today especially after the release of the Fed minutes at 2:00 p.m. ET. Early in the session there should be a bias to the downside based on overnight price action. About mid-morning, there may be a strong short-covering rally as investors square positions ahead of the minutes. Early in the session, investors may react to the release of the latest U.S. existing home sales figures at 10:00 a.m. ET. 

Gold And Silver Subject To The Fed Minutes

Gold And Silver Subject To The Fed Minutes
Gold And Silver Subject To The Fed Minutes
It’s the Fed and the Fed and the Fed again. With traders are holiday around the globe and data light, the Federal Reserve is the main event. Although the FOMC minutes are a top tier event and are usually on center stage, they will have more importance to traders today as trading volume is down, news is light with politicians and traders on summer vacation and little data scheduled on the global economics calendar. This puts the FOMC minutes in the center ring under the big top. Regardless of the reading of the minutes markets should be volatile. Traders are now positioning themselves ahead of the release. Gold prices pared the initial losses as a stronger dollar and easing bond yields supported prices. Uncertainty regarding the Fed’s bond buying program also swung gold prices between gains and losses. Demand for US gold coins has eased in recent weeks as buying from retail investors slowed down amid recovering gold prices. Russia increased its gold reserves to 32.2 million troy ounces in July from 32 million troy ounces in June. Gold prices internationally are expected to remain in range as investors would await the FOMC meeting minutes to get cues on the future course of Fed’s bond buying program.

A recent survey showed that a majority of economists expect the Fed to announce a tapering plan in September and suggest that the Fed will cut back their asset purchases by 10 billion US dollars. Gold is trading at 1367.70 down by $4.90 in the Asian session. Gold futures recovered yesterday to close higher on COMEX, as investors were encouraged by prospects for seasonal demand from Asia as the market awaited release of the latest US Federal Reserve policy-meeting minutes.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, increased to 914.12 tons, as on August 20. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,555.7 tons, as on August 20. Silver has taken a major tumble as trader’s book profits. Silver is down by 81 pips this morning trading at 22.99 after holding this week above the $23 price level.

The dollar index, which measures the US unit against six rivals, edged down to 81.238 from 81.255 on late Monday, after swinging between losses and gains. The dollar nose dives late yesterday to trade in the upper 80 range and rebounded this morning to trade at 81.00

Copper futures traded steadily on Tuesday but eased this morning to trade at 3.323, with traders reluctant to place large bets ahead of the release of Chinese manufacturing data and details from the Federal Reserve’s most recent policy meeting. Copper prices rose on Tuesday as a weaker dollar supported prices. However, fears of bond tapering by Fed limited the upside in prices. The global nickel market was in surplus by 74,200 tonnes in the first six months of the year, according to the International Nickel Study Group. Base metals are likely to go down on caution ahead of FOMC meeting minutes and Chinese and Euro zone manufacturing numbers tomorrow.

Comex High Grade Copper Futures Technical Analysis – August 20, 2013 Forecast

September High Grade Copper futures traded lower overnight. The market plunged after taking out a long-term uptrending support angle. Investors sold long positions on concerns that the Federal Reserve will scale back its monthly monetary stimulus. This move would drive up the U.S. Dollar, likely fueling a drop in demand.

Despite weaker U.S. economic data, the market is acting as if investors are expecting the Fed to begin tapering in September. This supports a Bloomberg survey which said sixty-five percent of economists asked believed the Fed would act next month.

There are no major economic reports today which means volume may be low, but not necessarily volatility. Selling pressure could continue throughout the day in anticipation of tomorrow’s release of the latest Fed minutes. The minutes could reveal more information on the Fed’s plan to begin reducing its bond-buying spree including when, how much and what criteria it will use to begin the process.

Daily September High Grade Copper
Daily September High Grade Copper

Speculators are currently leading the charge to the downside, but some investors are waiting for the U.S. Dollar to make its move. A sharp rise in the dollar will likely lead to an acceleration to the downside.

Technically, September High Grade Copper futures broke sharply overnight when the market took out the long uptrending Gann angle at 3.3400. Resistance drops in at 3.3365 today. Taking out this angle could trigger a rebound rally to 3.1865.

The daily chart indicates there is plenty of room to the downside. Based on the main range of 3.0365 to 3.3800, the first major downside objective is a retracement zone at 3.2083 to 3.1677. If the copper market is indeed getting ready to break then selling pressure should begin to accelerate into this zone over the near-term.

There may be one more rally to establish a secondary lower-top, but if this top forms then look for the main trend to change to down and the break to begin. 

Precious Metals & Base Metals Wait For Chinese Data and FOMC Minutes

Precious Metals & Base Metals Wait For Chinese Data and FOMC Minutes
Precious Metals & Base Metals Wait For Chinese Data and FOMC Minutes
Gold is trading at 1362.60 down by $3.10 in Asian trading this morning. Gold extended gains to a fourth session on Monday, hitting fresh two-month highs, helped by weak US data and further inflows into the world’s biggest bullion-backed exchange traded fund. The metal has now risen for eight sessions out of nine, gaining 8 per cent on the back of a weaker dollar, short covering and technical buying. The Fed’s $85-billion-a-month easing policy saw a flood of cash into developing economies and commodities when it was launched last year as dealers sought out places with higher interest rates or higher risk for better returns on their investments. However, with the US economy showing signs of improvement, market-watchers say the central bank will likely slow down its bond-buying, which in turn will lead to higher rates and a rising US dollar which will weigh on commodity and equity prices. Investors have yanked nearly $20 billion from bond mutual funds and exchange traded funds so far in August. That’s the fourth highest pullback ever, according to TrimTabs data. In June, investors took out $69.1 billion — the highest on record.  Investors are waiting for minutes on Wednesday from the US central bank’s July policy meeting for clues on when it will begin scaling back its commodities-friendly stimulus steps. 

The precious metal has risen about 6.5 per cent over the last 10 sessions, also supported by signs of increasing physical demand from China and India, and a possible halt in big outflows from exchange-traded funds (ETFs). Traders said they expected a further drop in prices as gold losses its momentum that was prompted by technical buying once prices crossed $1,350 last week. 

The Fed, which is due to release the minutes of its July policy meeting on Wednesday, had indicated earlier that it could start tapering the bond purchases if the labor and housing markets continued to recover. The withdrawal of the stimulus would be big blow to gold which hit an all-time in 2011 on the back of easy money from central banks around the world. It has lost nearly a fifth of its value this year on stimulus worries and outflows from bullion-backed ETFs. 

Base metals internationally are expected to remain in range on caution ahead of Chinese and Euro zone Manufacturing numbers and FOMC meeting minutes. Chinese HSBC PMI data is due later in the week.  Copper prices fell on Monday as investors remained cautious ahead of the FOMC meeting minutes due tomorrow. Copper premiums in China’s bonded warehouses dropped by $15 as high prices kept physical buyers on the sidelines. Silver is trading at 23.030 down by 13 cents after its climb late last week. Traders are booking profits as silver is not expected to trade above its current range. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,525.71 tons, as on August 15. Platinum and palladium are both trading in the red this morning.

 

Comex High Grade Copper Futures Technical Analysis – August 19, 2013 Forecast

September High Grade Copper futures are trading flat-to-lower overnight in light trading. Investors are focusing on the U.S. Dollar, demand for higher-yielding assets and technical conditions. We could be looking at a sideways trade because of the lack of major economic reports today and tomorrow.

Traders will get their first chance to react to economic developments on Wednesday when the U.S. releases its latest existing home sales figures and the Federal Reserve releases its latest minutes. There should be some activity on Thursday, following the release of the HSBC China manufacturing data.

After reaching its highest level in nearly three-months on Friday, copper futures traders could take a breather today as they await the reports later in the week. Overnight profit-taking overseas has the market leaning to the downside in early trading.

Uncertainty over whether the Fed will soon begin tapering its monetary stimulus is the biggest worry for traders at this time since this will directly affect demand. A Fed decision to begin reducing its stimulus as early as September should drive up interest rates and make the U.S. Dollar a more attractive investment. Since copper prices are dollar-denominated, foreign demand may drop, weakening prices. Continued economic strength in China and the Euro Zone could help soften the blow however.

Daily September High Grade Copper
Daily September High Grade Copper

Since the Fed decision is likely to be a market mover, investors are likely to put a lot of emphasis on the Fed minutes on Wednesday. This report is likely to set the tone for the rest of the week although the manufacturing data from China could also exert some influence.

Technically, the main trend is up on the daily chart. The current rally has taken the market from 3.0365 to 3.3800 over a 14 day period. This prolonged move in price and time has the market in a position to form a potentially bearish closing price reversal top. It will take another day of higher prices before this pattern takes shape, but if it does occur, copper may drop for two to three days or 50% of the last rally.

The key support angle providing strength and direction is a steep uptrending Gann angle at 3.3165. There may be a bounce following the initial test of this level, but if it fails to hold then look for the start of a sharp break with 3.32083 a potential downside target.

The long-term range is 3.8200 to 2.9855. This range has created a major retracement zone at 3.4028 to 3.5012. This tone is the best upside target. Since this is a major price zone objective, profit-taking and aggressive short-selling may take place inside this zone. 

We’ll be rolling over to the December High Grade Futures Contract on Tuesday. 

Silver Outperforms Gold As Precious Metals Rally

Silver Outperforms Gold As Precious Metals Rally
Silver Outperforms Gold As Precious Metals Rally
Gold continued to climb in the Asian session taking cues from Fridays US trading. Gold rose $8.50 to trade at 1379.50. Gold rose to a two-month high after holdings in the largest exchange-traded product posted the first weekly expansion this year. Gold touched an intraday high of 1384.55 gaining as much as 0.6 % before easing.

The price of gold has risen in recent weeks, spurred by a weaker U.S. dollar and short-covering activity, where investors close out bets that prices will fall. Gold is priced in dollars, making it more affordable to other currency holders when the greenback softens. Despite strength in the jewelry market and retail sector accompanying a recent decline in scrap supply, the gold market was over supplied to the tune of 152 metric tons in the second quarter and 217 tons in the first half of 2013.

Global gold exchange-traded fund holdings registered net outflows of 402 metric tons in the second quarter, the World Gold Council said in a report Thursday. The outflows coincided with a 23% decline in the price of gold, the largest quarterly fall since gold futures trading began on the last day of 1974.

A healthy signal on the labor market caused a steep sell-off in the market on Thursday. The Labor Department reported that weekly jobless claims had declined to 320,000 in the previous week, the lowest level since October 2007. Manufacturing output declined slightly in July, but T. Rowe Price economists note that a regional gauge of capital expenditure jumped. If confirmed by additional data, the rise suggests that business investment might provide a boost to the economy in the coming months. Although data also showed by consumer confidence tumbled last month.

The annual Federal Reserve gathering in Jackson Hole and the minutes of the last Fed meeting could keep markets volatile in the coming week, as traders watch for signs of when the central bank might curb its bond-buying program. The annual Kansas City Fed gathering in Jackson Hole starts Thursday, and while Fed Chairman Ben Bernanke will not be there, other officials will be, and they are bound to continue to express their views on Fed policy. The chairman has used the Jackson Hole podium to launch important ideas about policy. On the calendar this week is also the release of FOMC meeting minutes from their meeting on the first of the month. These minutes have a way to turn gold and the US dollar topsy turvy.

This morning silver is the major market performer gaining 186 points to trade at 23.508 after Chinese housing data surprised traders. China’s new home prices rose the most since Jan 2011 in the nation’s four major cities, led by a 17 % jump in Guangzhou and Shenzhen, on speculation the govt will refrain from imposing tighter curbs. Beijing and Shanghai prices both increased 14 % in July as 69 of 70 cities tracked by the govt climbed from a year earlier. For the third month in a row, the eastern city of Wenzhou was the only one to post a decline. Copper is not shining declining but moving between small gains and losses at 3.355. Platinum eased along with the base metals market to trade at 1525.80, while Palladium gained 1.7750 to trade at 761.85