Comex High Grade Copper Futures Technical Analysis – August 16, 2013 Forecast

September High Grade Copper futures posted a volatile outside move on Thursday, but managed to rebound from the low. Although the market finished under the opening and previous close, the main trend was not damaged, putting the market in a position to continue the rally on Friday.

High Grade Copper futures are nearing a 10-week high on expectations of higher global demand. Earlier in the month, the market received a boost on signs of a recovery in China. The next thrust was fueled by solid economic data from Europe, signaling perhaps an early exit from its recession. Lately, signs that the U.S. recovery is picking up momentum also underpinned prices.

The mixed situation regarding the U.S. Dollar has actually been beneficial for copper prices. With the U.S. economy beginning to pick up steam, many investors had expected to see the Greenback rally. Since copper prices are dollar denominated, a rise in the dollar would’ve put pressure on copper. Instead, the improving Euro Zone economy has encouraged investors to buy the Euro over the dollar. This has helped boost prices.

Daily September High Grade Copper
Daily September High Grade Copper

Today’s housing, non-farm productivity and consumer prices could launch another rally if they come out mixed or weaker. Although the main trend is up on the daily chart, copper prices still remain vulnerable to a near-term set-back once the dollar begins to accelerate to the upside. This is likely to occur once investors start to get a little clarity from the economy and the Fed. Investors are waiting for the Fed to formally announce the start of the tapering of its monthly monetary stimulus as well as the amount of the reduction. In the meantime, speculators will continue to move prices based on the U.S. economic reports.

Technically, the market is getting strength and direction from a steep uptrending Gann angle from the July 30 bottom at 3.0365. This angle comes in at 3.2965 today.

The next upside target is a major 50% level at 3.4028. The first test of this level should produce a technical bounce to the downside on profit-taking.

The prolonged move in terms of price and time has put the market in the window for a potential closing price reversal top. Traders should watch for possible higher-high, lower-close following a test of 3.4028. Although this chart pattern typically indicates the start of a 2 to 3 day sell-off, it doesn’t necessarily mean the trend is turning to down, but it could give counter-trend investors a jump on the down move early.

Today’s focus should be on the U.S. data and the potential for a closing price reversal top. Trend traders should continue to play for the move into the 50% level at 3.4028, but be prepared for the reversal. 

US Data Rocks Gold

Gold prices on the global markets rose to a 2 month high yesterday to trade at 1361 and continued to gain on Friday morning in the Asian session as a weaker dollar and technical buying supported prices. Paulson & Co. The largest investor in the SPDR Gold Trust, lowered its stake to 10.2 million shares in the quarter ended June from 21.8 million at the end of the first quarter. A twitter release from activist investor Carl Icahn said that he took a 1 billion dollar stake in Apple, but sold his gold holdings. Global gold demand fell to a four-year low on record ETP sales and less central bank buying, according to the World Gold Council. While silver ETF holdings rose to a record 19,890 metric tons and are up 5.1 percent this year.

Taking the lead from positive global markets, the Dollar Index (DX) traded in the negative territory, falling around 0.7 percent on an intraday basis and closed at 81.21. Mixed economic data from the US on Thursday led to sentiments in the global markets that the QE taper would not begin soon as the US economy is yet to recover fully. Weekly jobless claims declined to their lowest level since in six years for the week ended 10th August by 15,000 to 320,000 from a revised 335,000 in the previous week. While this data was positive and pointed towards a tapering action by the Fed, other data like Philadelphia and Empire State manufacturing index along with industrial production showed a negative picture. But broadly, US economic indicators have been improving and are likely suggesting a pullback by the Fed in the coming months.

Data from the World Gold Council indicated that global gold supply had declined during the second-quarter due to a reaction to a sharp correction in prices. A drop in recycling activity was seen and also that gold miners have reacted to the drop in prices, thus leading to a decline in mining activity.

Despite the developing negative perspective towards gold, the WGC said that gold demand in China and India is expected to rise in 2013 as compared to 2012 on the back of fall in prices that would eventually lead to increase in physical demand according to Reuters

In the period of April-June’13, gold imports in India more than doubled, with shipment climbing to 338 metric tons during the period from 153 tons in the same period last year. Fall in prices led to a jump in imports in order to meet demand.

Silver broke above the 23 level to trade at 23.043 outperforming most of the markets. Prices of silver increased more than 5 percent on yesterday to $23 as a weaker Dollar Index supported upside by making the white metal look cheaper for holders of other currencies. Copper is trading at 3.364 gaining steadily. Industrial metals prices dipped yesterday on reports of increased production and uncertainty about when the United States will start trimming its economic stimulus, though growing confidence about a global economic recovery underpinned prices. Copper prices internationally fell on Thursday as lower than expected unemployment claims raised fears of an early winding of Fed’s bond buying program. Uncertainty about the strike at Escondia mine in Chile limited the downside in prices. Base metals are likely to go up as optimism over demand from China and a weak dollar amid strike concerns at the world’s biggest copper mine are likely to support prices.

Comex High Grade Copper Futures Technical Analysis – August 15, 2013 Forecast

Despite the strong rally in September High Grade Copper, the market still remains shaky because of the possibility of Fed tapering in September. Although stronger economic data from China and the Euro Zone have been supportive, better-than-expected U.S. economic data today could trigger a rebound in the U.S. Dollar, putting near-term pressure on the dollar-denominated copper market.

Today’s slew of U.S. economic activity should trigger some volatility and a two-sided trade if the data is mixed. Stronger than expected data is likely to mean the Fed will begin tapering in September. This should pressure prices. Weak reports are likely to fuel another leg up since they will likely lead to a drop in the dollar.

Early reports center on U.S. consumer prices and weekly jobless claims, two key categories the Fed will be focusing on when it votes in September on whether to start reducing its monetary stimulus. Later in the session, investors will get the opportunity to react to manufacturing data. Again the key is whether all of these reports will be in sync or mixed. Similar data will trigger a one-sided trend day while mixed data will mean a choppy, two-sided trade.

Daily September High Grade Copper
Daily September High Grade Copper

Technically, September Copper remains in a position to post a daily closing price reversal top. This higher-high, lower-close formation is likely to occur following a test of the major 50% price at 3.4028.  

The main trend is up on the daily chart. The uptrend is not likely to be threatened at all, but the first sign of weakness will be a break through a long-term uptrending angle at 3.2780. This angle has provided support and direction since the bottom was formed at 3.0365 on July 30.

There is no bias at this time which likely means investors will let the economic data dictate the direction of the trade. Bullish economic data may actually be bearish for copper because it could help the Fed decide to begin tapering in September. 

Lackluster US PPI Numbers Drives Up Gold Prices

Lackluster US PPI Numbers Drives Up Gold Prices
Lackluster US PPI Numbers Drives Up Gold Prices
Gold gained a bit of momentum after traders were disappointed over US data on Wednesday. Gold is trading at 1339.20 continuing its rally in the Asian session adding $5.80.

The US producer price index (PPI) for July was unchanged for the month. The PPI measures the price of goods at the farm or factory gate before transport and other costs are added. The flat PPI result caused the US dollar to fall, pushed the gold price up, and boosted commodity currencies. Such small price increases give the Federal Reserve latitude to prop up the economy with near-zero interest rates and bond purchases. Indeed, the central bank’s latest statement highlighted that inflation persistently below its 2 per cent target could pose a risk for the economy. Fed officials, who focus on other measures of inflation, are still counting on inflation to move closer to their objective by next year. 

Gold edged up after dropping 1 percent the previous session, but a steady dollar and stronger U.S. Treasury yields, coupled with worries the U.S. Federal Reserve may start tapering its monetary stimulus soon capped further upside. A pullback in the Fed’s $85 billion monthly bond purchases would support a higher interest rate environment that diminishes gold’s attractiveness. Uncertainty over the timing of the roll back has already pushed the metal down 21 percent this year, after 12 consecutive years of gains.

Markets are seeing summer trading and may remain in the $1,300-$1,350 range for few weeks yet.
Gold rose 0.3% on Wednesday and it fell 1.1 percent on Tuesday, ending a four-day winning streak after strong U.S. economic data and further import curbs by key buyer India.

The U.S. economic performance remains too mixed for Fed policymakers to lay out a detailed path for reducing and eventually halting their asset-purchasing next month, Atlanta Fed President Dennis Lockhart said on Tuesday which just confused traders all the more as they were thinking that the Fed would adopt a clear path come their September meeting.  The next Fed meeting is scheduled for Sept. 17-18. Until then, markets will scrutinize economic data to gauge the strength of economic recovery. The main event on Wednesday was speech by St. Louis Fed President James Bullard on the U.S. economy and monetary policy and he also said that data is not straight forward at this time and would need more data or direction before making a decision. The US will see a lot of data today, ranging from the weekly unemployment claims, to industrial manufacturing and CPI numbers.

Silver is the surprising metal, breaking above $22 to trade at 22.048 after industrial metals climbed along with precious metals. Silver has climbed almost $4 over the past weeks. Copper is trading in the red this morning giving back some of yesterday’s gains but remains well in the 3.32 range.

Comex High Grade Copper Futures Technical Analysis – August 14, 2013 Forecast

The strong rebound in September High Grade Copper futures on Tuesday has the market in a position to move higher this morning. Yesterday, the market demonstrated the presence of strong buying when it failed to confirm the closing price reversal top. The move through 3.3290 actually negated the potentially bearish chart pattern. The strong upside momentum has the market in a position to challenge the major 50% level at 3.4029 and the main top at 3.4125.

The current rally in copper is being triggered by stronger economies in China and the Euro Zone. Investors feel that these economies may have turned the corner, leading to the prospect of higher demand.

Daily September High Grade Copper
Daily September High Grade Copper

At the same time, investors have been punishing the U.S. Dollar, threatening to wipe out all of its gains from June 19, the day the Fed first mentioned the possibility of tapering its monetary stimulus. Investors now feel the U.S. economy is too inconsistent for the Fed to make a change in its current $85 billion per month monetary stimulus program. The drop in the dollar typically means increased demand for dollar-denominated copper.

Today’s U.S. Producer Price index report could shed a little light on the Fed’s next move. Preliminary estimates are calling for PPI to be unchanged from the previous month at 0.2%. A higher number could trigger a break in copper. Missing the estimate to the downside will likely mean a lower dollar and higher copper prices.

Technically, the prolonged rally in terms of price and time have put September copper in a position to post a potentially bearish closing price reversal top. Investors should start to watch for a higher-high, lower-close chart pattern especially after a test of the 50% level at 3.4028. 

Chinese Demand Weighs On The Metals Pack

Chinese Demand Weighs On The Metals Pack
Chinese Demand Weighs On The Metals Pack

Silver remains the stellar performer in the metals pack trading at 21.388 this morning up by 45 pips, while gold is flat at 1322.20 and copper eased 7 pips to trade at 3.307. Industrial metals prices touched their highest level in more than nine weeks yesterday as further signals that supply in China was tighter than expected prompted investors to buy, but gains were capped by a firm dollar. The greenback gained on Tuesday to trade at 81.79. China’s slowing economy has hammered businesses supplying the raw materials for growth, with coal and aluminum firms at risk of defaults and closures after clocking up at least $490 billion of debt in a rush to expand on forecasts earlier in the year. China’s original forecast for 2013 was a growth rate around 8% which was lowered mid-year to 7.75% and then to 7.6% and now the Chinese government is saying that they will meet the current forecast, except the IMF and other agencies have revised China’s growth to 7.5-7.4%. This miss in forecast is weighing heavily on businesses and economies that supply materials to China.

China may have to increase copper imports in the months ahead as domestic smelters are forced to cut production of the metal due to problems disposing of sulphoric acid, a by-product of the smelting process. Copper prices rose on Tuesday as stronger than expected German economic sentiment and positive US data supported prices. However, a stronger dollar and fears of Fed scaling back the bond buying program limited the upside in prices. Base metals are likely to go up today on expectations of positive Euro zone and German GDP numbers which can support prices. US manufacturing index and industrial production due tomorrow would also be eyed to confirm the demand trend from US.

Silver is taking cues from upside in base metals complex along with favorable economic data from Euro Zone and US, silver prices gained around 0.3 percent in the yesterday’s trade. However, strength in the DX coupled with downside in gold prices capped sharp gains in the prices. The white metal touched an intra-day high of $21.closed at $21.40 in yesterday’s trading session.

Gold on the other hand eased yesterday to trade at 1321.0 and remains quiet this morning. Gold prices fell on Tuesday after strong retail sales growth in US raised optimism over economic recovery and renewed fears of a slowdown in Fed’s bond buying program soon. India raised the import duty on gold and silver to 10% from previous 8% and 6% respectively to curb its imports and control the surging current account deficit. Gold prices internationally are expected to go down as slowing demand concerns from India and expectations of recovery in eurozone can hurt gold prices. Gold prices declined around 1.1 percent in the yesterday’s trade on the back of strength in the DX. However, recovery seen in the SPDR gold holdings which was at 911.13 tons coupled with upbeat global market sentiments cushioned sharp fall in prices.

Comex High Grade Copper Futures Technical Analysis – August 13, 2013 Forecast

September High Grade Copper continued its strong rally as investors chose to ignore the stronger dollar and instead focus on the possibility of increased demand from China. This morning, favorable U.S. retail sales data helped trigger a short-covering rally in the U.S. Dollar. Since copper is dollar-denominated, this typically would’ve triggered a drop in prices because it would’ve made copper too expensive for foreign investors. Instead of reacting to the normal relationship between the dollar and copper prices, investors instead continued to buy copper on the heels of last week’s strong economic reports from China. 

Daily September High Grade Copper
Daily September High Grade Copper

Adding to the rally was the strength in the Euro Zone economy. With the economy picking up in Europe, many investors are now pricing in the possibility the recession will end sooner than expected. In addition, to expectations of a pickup in demand by China, investors are beginning to price in renewed demand from Europe. Despite the possibility of the Fed tapering its aggressive monetary stimulus, investors feel fresh global demand will underpin copper at least over the near-term. The possibility the Fed will refrain from curtailing its stimulus could even drive copper prices higher. If this is the case then the dollar will drop, increasing the possibility of even further foreign demand for copper. 

Technically, the main trend is up on the daily chart. On Tuesday, the buying was so strong that it even negated the previous day’s closing price reversal top at 3.3290. This is a sign that investors are buying with clarity and conviction. The longer-term charts indicate the buying may not let up until the 50% objective is reached at 3.4028. There is one thing to worry about however. Since the market is in the midst of a prolonged move in terms of price and time, it is vulnerable to a closing price reversal top. Although this chart pattern failed to draw selling pressure today, it is possible that investors may try to pull it off one more time. If it does form and it is confirmed then look for the start of a sharp two-day correction. It wouldn’t necessarily mean the trend is changing, but it will indicate the selling is greater than the buying at current price levels. 

 

Gold Likely To Crash As ETF’s Pull Out

Gold Likely To Crash As ETF's Pull Out
Gold Likely To Crash As ETF's Pull Out
Gold is trading at 1333.70 flat in the Asian session as traders sell off to book profits after gold rallied. Gold prices in the futures markets are likely to be range-bound with a bias towards the downside in line with the global market. As it has been happening this year, the yellow metal once again is facing selling pressure. Investors are opting to sell at every rise and Monday’s over one per cent rise in the precious metal has given them an opportunity to cash in their investments. Data showed a climb in ETF purchases for the first time since June trader’s responded push up gold prices to recent highs. The market seems bent on hammering gold and that is one of the reasons why even data showing lower than expected growth are unable to drive it higher. The rise in gold holdings in exchange-traded funds did not happen on Monday as they were unchanged at 911.13 tonnes on SPDR Trust, world’s largest for gold.

Gold is taking a breather today after four days of gains but is holding near three-week highs on hopes that physical buyers and investors will return to the market.  The recent rally was sparked by the release of strong Chinese factory data on Friday which pushed up metals prices. The metal has gained over 4 per cent in the last four sessions through Monday, also profiting from US dollar weakness and a surprise rise in holdings of gold exchange-traded funds (ETFs). Gold rose nearly 2 per cent in the previous session on strong Chinese gold consumption and an inflow to SPDR Gold Trust, the world’s biggest gold ETF. The top eight gold ETFs have recorded outflows of about $US26 billion so far this year, hurting gold prices. A reversal in the trend will aid a price recovery.

China’s consumption of gold in the first six months of the year surged by more than half as sliding prices of the metal lured buyers, data showed, reinforcing expectations that the nation will overtake India as the world’s top gold consumer this year. Gold prices have lost about a fifth of their value this year after 12 years of gains, releasing pent-up demand across the world and particularly in India and China.

China consumed 706.36 tonnes of gold in the first half of 2013, up 54 per cent from the year-ago period, the China Gold Association said in a statement on its website.

Silver eased by close to 10 cents this morning after skyrocketing above the 21 price level on industrial demand and a rise in precious metals over the last few sessions. Silver is trading at 21.243 remaining strong against the gaining US dollar, which is trading at 81.44 this morning. Copper slipped while aluminum extended gains on Monday as signs of a pickup in top metals consumer China and expectations of encouraging eurozone data came up against a rise in the dollar. The U.S. commodities market regulator has subpoenaed a number of major metals warehousing firms, including Switzerland based commodities giant Glencore, seeking documents and communications from the last three years as an inquiry into complaints about inflated metals prices gathers steam. The metals warehousing scandal is weighing heavily on major US investment banks which control the prices and costs.

Comex High Grade Copper Futures Technical Analysis – August 12, 2013 Forecast

September High Grade Copper futures rallied overnight on renewed speculative buying, following last week’s solid economic news from China, but sellers quickly dominated the market after Japan’s economy grew less than expected. The news from Japan triggered a drop in demand for higher yielding assets.

The news that Japan’s second-quarter gross domestic product rose an annualized 2.6 percent versus estimates of 3.6 percent and the previous quarter’s gain of 3.8 percent, triggered a drop in the Japanese Yen and a subsequent rally in the U.S. Dollar. Since copper is dollar-denominated, this should make it less attractive to foreign investors.

Daily September High Grade Copper
Daily September High Grade Copper

Technically, this could also lead to a near-term correction of the rally from 3.0365 to 3.3290. This makes 3.1828 – 3.1482 a potential downside target. Before it reaches this zone, however, the market will test an uptrending Gann angle at 3.2165 today.

Today’s early price action has the market in a position to post a daily closing price reversal top. Since the recent rally has been a strong move in terms of price and time, a lower close could set up the start of a 2 to 3 day break equal to at least 50% of the rally from 3.0365 to 3.3290. This price is 3.1828.

With the U.S. Dollar rebounding from oversold levels and in a position to form a double-bottom, copper futures could feel some downside pressure over the near-term despite last week’s strong data from China. In addition, investors are waiting for the Fed to announce when it will begin tapering its monetary stimulus. Speculators could aggressively price this in this week if U.S. Retail Sales or inflation data come out stronger than expected. 

Gold and Silver Rally

Gold and Silver Rally
Gold and Silver Rally
Gold is trading at 1328.60 gaining $16.40 in the Asian session. Gold climbed for the third straight session on Friday, eking out a small gain for the week and pulling further away from a 3-week trough as a softer US dollar beat fears of a tapering in stimulus measures next month. Over the past week numerous Fed members publicly said they supported “tapering” beginning in September. U.S. stocks fell, giving the S&P’s 500 its biggest weekly loss since June, as investors pulled money from exchange-traded funds and weighed growing signs the Fed Reserve will cut stimulus this year. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, increased to 911.13 tons, as on August 9. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,396.73 tons, as on August 2. Gold climbed to the highest level this month after holdings in the biggest bullion-backed exchange-traded product expanded for the first time since June.

The US dollar rose from a recent 7-week low against a basket of currencies on Friday and continued to climb this morning hitting 81.27, as investors bought at cheaper levels, with speculation as to when the Federal Reserve might begin cutting back its monthly bond buying program dominated the market talk. Momentum in the gold price continues to build with the yellow metal climbing 1.1% in the spot market to US$1330 an ounce.  The price of an ounce is now 5.3% higher than a month ago, but down 17.8% from a year ago.

Boosting the price of metals is demand out of China, with speculation that this will continue to grow, but there are also factors weighing on the metal such as when the U.S. Federal Reserve will begin trimming its monthly bond purchases. Hedge funds have reduced their bullish positions, with data from the U.S. Commodity Futures Trading Commission showing that money managers have cut their net-long position by 27% to 48,103 futures and options by August 6.

Industrial metals prices rose to its highest in two months on Friday after upbeat Chinese factory data added to signs of steadying growth in the world’s top consumer of metals. Hedge funds and money managers cut their net short positions in copper futures and options and their net long positions in gold and silver in the week to Aug. 6, a report by the Commodity Futures Trading Commission showed on Friday. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 7.6 percent from last Friday. Copper climbed to trade above the 3.30 level but eased this morning to trade at 3.299 while silver was able to take advantage of strength in both precious metal and industrial metals to climb to the $21 range. Silver is holding its momentum this morning adding 64 cents to trade at 21.048

Comex High Grade Copper Futures Technical Analysis – August 9, 2013 Forecast

September High Grade Copper futures finished the week sharply higher after posting its strongest surge in 11 months. Upbeat Chinese factory data helped boost prices, sending the market convincingly higher through a key Fibonacci level at 3.2605. The daily chart indicates there is plenty of room to the upside with 3.4028 a likely near-term target if the upside momentum can continue.

Bullish economic numbers this week from China helped ease concerns of an economic slowdown, catching some shorts by surprise and setting the tone for higher prices over the near-term. This scenario is likely to continue next week unless the Fed finally tells investors when it is going to begin tapering its monetary stimulus. Although the Fed has been holding many investors in check for nearly a month, copper traders have for the most part, cast aside these worries instead choosing to focus on the renewed strength of the Chinese economy.

The latest economic data showed factory output in July rose 9.7 percent, retail sales grew 13.2 percent and inflation held steady. The strength of these numbers may be evidence that investors have been a little too pessimistic about China’s economy. Stronger numbers from China should keep the U.S. recovery on track while helping Europe to pull out of its recession.

Daily September High Grade Copper
Daily September High Grade Copper

Despite the strong showing and powerful price action, copper investors still have to be concerned about when the Fed will begin tapering its monetary stimulus. This is because a cutback in financial aid will mean higher interest rates and a stronger dollar. Since copper is dollar-denominated, a sizable rally in the U.S. Dollar could stop the copper rally in its tracks and trigger a meaningful retracement to the downside.

Technically, September Copper is in an uptrend on the daily chart. The series of higher-bottoms and higher-tops is a strong sign that new buying rather than short-covering is driving this market higher. Although the major 50% level at 3.4028 is a potential upside target, a test of this level will not necessarily mean a new bull market is beginning, but rather it could setting up a potential selling opportunity since the Fed could act as early as September to begin curtailing its financial stimulus.

So while the news from China was strong enough to trigger a powerful breakout, momentum could come to a screeching halt next week if U.S. economic data beats estimates and Fed speakers reaffirm the thought the central bank will begin reducing aid sooner rather than later. 

Strong Data From China Kicks Off Gold Rally

Strong Data From China Kicks Off Gold Rally
Strong Data From China Kicks Off Gold Rally
Gold turned skyward towards the end of the trading jumping 1.9% to 1309.90 an ounce on the New York Mercantile Exchange. Gold is trading at 1311.40 in the Asian session. Helping the yellow metal was positive sentiment came from China trade data for July, which topped expectations, suggesting that the economy might be stabilizing. Also driving gold’s rise was an anticipated uptick in demand from retail Chinese customers as the economic giant – and world’s foremost customer for bullion now that former Number 1 India is subject to rules designed to curb consumption of the precious metal – reports robust export figures and other signals of economic growth.

China’s exports rose 5.1% in July from a year earlier. The median estimate was for a 2% increase in a Bloomberg News survey, after June’s 3.1% drop. Imports gained 10.9%, leaving a trade surplus of $17.8 billion. Exports to the US and the European Union, China’s biggest markets, increased for the first time in five months. Though judging on one month’s data is a bit premature, still the fact that the China’s official manufacturing and service industry indexes rose in July is an encouraging signs, thus growth target of 7.50% looks achievable.

China’s inflation quickened to 2.8% last month from 2.7%in June, while growth in industrial output may remain unchanged at 8.9% from a month earlier, according to Bloomberg. Sentiment turned better after gold advanced in overseas markets before the US jobless claims report, traders said. Gold in Singapore, which normally set price trend on the domestic front, rose by 0.8 per cent to 1,297.69 yesterday morning. Gold rallied $24.60, or 1.9%, an ounce on the New York Mercantile Exchange, joined by a more than 3% jump in copper futures after China reported a surge in overall imports and exports in July. China, the world’s largest copper consumer, said imports for copper rose 12% from a year ago, and increased 8.1% from June. September copper responded with a jump of 10 cents, or 3.1%, to $3.27 a pound in Nymex trade according to Marketwatch.com.  Copper is trading at 3.248. Silver followed precious metal and industrial metals upward to trade at 20.145.

Reports on Chinese industrial output, retail sales and fixed-asset investment were due out later Friday. The metal lost 22 percent this year on speculation the Fed will wind down its quantitative-easing program. Charles Evans, Sandra Pianalto and Richard Fisher, regional Fed presidents in Chicago, Cleveland and Dallas, said this week the central bank may be closer to tapering bond buying as the jobs market recovers. Jobless (INJCJC) claims fell in the four weeks ended Aug. 3 to the lowest since November 2007, the government said yesterday according to an article in Reuters.

 

Comex High Grade Copper Futures Technical Analysis – August 8, 2013 Forecast

September High Grade Copper futures are called better this morning. Upside momentum appears to be building, putting the market in a position to challenge the high for the week at 3.2090. A sustained move through this price could trigger an even further rally to the recent swing top at 3.2340.

The main trend is up based on the series of higher bottoms. The short-term range is 3.0365 to 3.2090. The retracement zone of this range at 3.1228 to 3.1024 provided support yesterday when the market traded down to 3.1285.

Yesterday’s recovery rally put the market on the bullish side of an uptrending Gann angle from the 3.0365 main bottom. This angle, at 3.1765 today, could provide solid support if tested.

Daily September High Grade Copper
Daily September High Grade Copper

The main resistance remains a major retracement zone at 3.1990 to 3.2494. The market straddled the 50% level of this range several times over the past week, suggesting the presence of a major seller. Overtaking this area should trigger an acceleration to the upside with the Fibonacci level at 3.2494 the next likely upside target.

Fundamentally, the falling dollar and speculation the Fed will refrain from making any changes to its monetary stimulus are the main catalysts behind the current rally. Further support is being generated by strengthening Chinese and Euro Zone economies. Speculators are betting that these trends will lead to increased demand.

Today, investors will get the opportunity to react to the latest U.S. weekly jobless claims. A weaker than expected report should trigger a breakout to the upside since it will put more doubt into the minds of traders about whether the economy is strong enough for the Fed to begin reducing its monetary stimulus. A poor report should weaken the U.S. Dollar, encouraging more foreign buying of dollar-denominated copper. 

Comex High Grade Copper Futures Technical Analysis – August 7, 2013 Forecast

September High Grade Copper futures are expected to open sideways to lower this morning. The current rally appears to have stalled at a retracement zone as investors pared positions ahead of key data from China. Although the market seems to be on an upswing, investors still aren’t sure about demand. Better than expected data on consumer prices, producer prices and retail sales later from China later in the week will be signs the economy is picking up. This could trigger a surge in copper prices.

Also exerting an influence on copper prices is the uncertainty over the Fed’s decision to begin reducing monetary stimulus. Recent sluggish economic data is causing investors to question whether the U.S. is strong enough to warrant a cut in the $85 billion in monthly stimulus. Early forecasts are calling for a September cut of at least $20 billion. The Fed will have the rest of the month to look at economic data before making its decision at its September 17 – 18 monetary policy meeting.

Daily September High Grade Copper
Daily September High Grade Copper

Technically, the series of higher tops and higher bottoms means September High Grade Copper futures are in an uptrend on the daily chart. Yesterday, however, the market ran into 50% resistance at 3.1990 before backing down into the close. A major downtrending angle at 3.1925 also provided resistance.

Although the uptrend is not being threatened, the market could test uptrending Gann angle support at 3.1565. A sustained move through this angle could trigger an even further decline to another angle at 3.1565.

Today, the market starts out with a slight bias to the upside. Although there aren’t any major U.S. economic reports, investors will be focused on U.S. interest rates and the U.S. Dollar. Higher rates could boost the dollar, putting pressure on copper prices. If the Greenback continues to fall then look for copper prices to get a boost.

 

Gold Weighed Down By Fed Speak

Gold Weigh Down By Fed Speak
Gold Weigh Down By Fed Speak

Gold continued to decline this morning dropping by $5 in the Asian session to trade at 1277.50. The precious metals complex is under pressure on account better than expected indicators out of the US. Though the US employment report showed less than expected jobs, the underlying factors point to continuing recovery. Also, recovering European economy reduces the need for further easing in the region in the near term. Gold slipped on US ISM services data and comments from FOMC’s Fisher that the tapering is near this sentiment has now been echoed by three Fed members as traders seem to be sure that tapering is imminent at the end of the summer.

Gold prices fell below the key $1,300 mark, as investors wrestled with uncertainty about the Federal Reserve’s timeline for reducing monetary stimulus. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 915.04 tons, as on August 7. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,396.73 tons, as on Aug 2.

Recent reports show that China could overtake India as the world’s largest gold consumer as the country’s gold demand is expected to top 1000 tons this year. This increase in Chinese demand is coming at a time when India is putting excessive curbs on demand and supply of the yellow metal, in order to curb demand. An increase in Chinese demand is expected to be backed by rise in investment and jewelry demand. Last year, China’s demand for gold fabrication that goes into making of jewelry and other articles had touched 590.5 tons.

The dollar index, which tracks the US currency’s movement against six rivals, fell to 81.609 from 81.868 on Monday. The US dollar fell broadly against major currencies, as Federal Reserve officials hit the speaking circuit, adding to confusion about when the central bank could begin to slow its asset purchases. Charles Evans, president of the Chicago Fed Bank, said Tuesday the central bank is “quite likely” to begin stepping back its bond buys this year, adding that economic fundamentals are “actually really better.”

Traders can expect precious metals to trade lower on the back of weak global market sentiments. Additionally, declining trend in SPDR gold holdings will also exert downside pressure on prices. Further, strength in the DX will act as a negative factor.

Silver fell yesterday and again this morning to trade at 19.395 and continues on a negative bias as precious metals remain weak. Industrial metals prices rose yesterday, helped by a weak dollar and ahead of trade and industrial output data from China this week that should shed light on the outlook for demand from the top metals consumer. Copper rose near its two-week high in early trade session, as investors bet on stronger demand following more upbeat readings on global economic activity. Copper is trading at 3.157 easing this morning after yesterday’s gains. Copper prices closed slightly higher on the London Metal Exchange Tuesday, after a raft of positive economic data spurred investors to cut bets that prices would fall. 

Comex High Grade Copper Futures Analysis – August 6, 2013

September High Grade Copper futures had a volatile session on Tuesday. Initially the market rallied on the weaker U.S. Dollar, but investors decided to take profits on the move as they squared positions ahead of industrial data from China. This report is expected to reveal the current supply and demand outlook for the metal since China accounts for about 40% of the world’s copper demand.

The dollar is reacting to the possibility the sluggish U.S. economy will mean the Fed will refrain from tapering its monetary stimulus until later in the year. Reducing the stimulus will mean higher interest rates and greater interest in the dollar. A higher dollar could pressure copper prices since it will lead to lower demand from foreign buyers.

Daily September High Grade Copper
Daily September High Grade Copper

Traders are watching China because recent economic data has suggested the economy is slowing. Although the industrial report may indicate some slowing, the figures are not expected to show the economy is on the brink of recession.

Technical analysis of the daily copper chart suggests the market is range bound between a pair of 50% retracement levels at 3.2045 and 3.1353. There is a slight bias to the upside because of the higher-bottom, higher-top chart pattern, but momentum appears to have slowed as traders await the data from China.

A breakout over 3.2340 will resume the uptrend, but the market may run into resistance at 3.2459. The main trend will remain up on the daily chart until the swing bottom at 3.0365 is taken out with conviction. 

Gold Falls Below $1300 In Asian Session

Gold Falls Below $1300 In Asian Session
Gold Falls Below $1300 In Asian Session

As reported yesterday, gold looked to be heading back to its down trend below the all-important 1300 price level. The shiny commodity did as expected and did it in style dropping to 1291.75 in the Asian session down 0.80%.  The dollar index is trading marginally down by 0.10%, limiting the fall in gold prices. The metal rose early in Asian trading on a weaker dollar but failed to find support amid lackluster demand in China, the second biggest gold buyer. Losses were exacerbated by technical selling once the price fell below $1,300. 

The Dallas Federal Reserve president Fisher said that the Fed will consider tapering the quantitative easing very soon as the US economy is improving. This may have pressurized gold prices in the morning. From the economic data point of view, German factory orders might improve and support gains in the euro, limiting the fall in gold prices. However, in the US session, the dollar is expected to remain positive on the back of a positive trade balance, which would pressurize gold prices later today.

Gold and silver futures closed slightly lower, as investors continued to react to last week’s economic data and expectations for an eventual slowing of the Federal Reserve’s monthly asset purchases.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 917.14 tons, as on August 6. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,396.73 tons, as on August 2. Weak physical buying in China and India was also seen pressuring the commodity prices to certain extent in the global market to certain extent. 

The base metals complex traded on a negative note in the yesterday’s trading session as a result of weak global market sentiments in later part of the trade. Further, favorable economic data from US led to expectations of pullback in stimulus measures which acted as a negative factor. However, sharp downside in prices was cushioned on the back of decline in LME inventories coupled with rise in non-manufacturing data from US. Copper is trading at 3.164 this morning down by 3 pips but remaining in a tight range. While silver prices at the international market are trading at $19.618, down by 0.52% since the morning.

Silver prices are taking cues from the statement by Dallas Fed chairman, in which he stated that THE Central Bank may soon taper the monetary stimulus program. The strengthening of the dollar index against the majors may keep silver prices weak. From the eurozone, German factory orders might increase and may limit the fall in silver prices on the back of the appreciation in the euro. However, gains in silver prices would be limited during the US session on the back of the appreciation in the dollar.

 

Comex High Grade Copper Futures Analysis – August 5, 2013

September High Grade Copper futures closed lower on Thursday as traders took profits following a solid three day rally from 3.0365 to 3.2060. The daily chart indicates the market may be set up for a break into a retracement zone at 3.1212 to 3.1012. Since the main trend is up, buyers may step in at this zone.

Besides the retracement zone, uptrending Gann angle support moves up to 3.1165. On the upside, resistance is at 3.1940.

Daily September High Grade Copper
Daily September High Grade Copper

Fundamental factors also played a role in today’s weak close. Firstly, many investors are heading to the sidelines ahead of China’s Trade Balance repot on Wednesday. The recent better-than-expected purchasing managers’ index may have been a sign the Chinese economy turned. This week’s report may confirm this assessment. Some traders may be waiting for confirmation before stepping back into the market.

Today’s stronger-than-expected U.S. ISM Services PMI report may have also influenced investors. Since the Fed is gauging the strength of the economy while it decides whether to begin tapering its monetary stimulus, many investors may have decided to pare positions after Monday’s strong economic report. This could have been another reason behind today’s weakness.

Monday’s inside move indicates investor indecision and uncertainty. The current chart pattern suggests the possibility of a two-sided trade over the near-term. The market will either go after the recent tops at 3.2060 and 3.2340, or head into a retracement zone at 3.1212 to 3.1012. 

Copper Shorts Up Gold Longs Down

Copper Shorts Up Gold Longs Down
Copper Shorts Up Gold Longs Down

Gold is trading at 1316.95 as Asian investors push up the commodity in early trade to gain $6.45 after Friday’s close at 1310. Gold declined to a 2-week low in early trades on Friday, after falling through a key technical level of $1,300 per ounce, as strong US economic data raised fears that the Federal Reserve may start to taper its commodities-supportive stimulus measures. Data from the U.S. Labor Department on Friday showed that the number of jobs outside the farming sector increased by 162,000 last month, the smallest gain in four months and below analysts’ expectations. A top Fed official said on Friday the U.S. economy was improving modestly but needs to gather more steam, while cautioning that the central bank ought to wait for more evidence of an upturn before tapering bond purchases

Gold traders in India stayed on the sidelines, as importers stopped shipments due to uncertainty over the new import policy even as prices fell more than 1.5% to their lowest level in a week.

Outflows from the top eight gold ETFs tracked by Reuters have totaled 19mn ounces so far this year, or about $25bn at current prices. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 918.64 tons while silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,396.73 tons, as on August 2. Hedge funds and money managers trimmed their gold net longs and raised their bullish position in silver futures and options, a report by the Commodity Futures Trading Commission showed on Friday. As long as the ETF buyers and the hedge fund investors stay sidelined, the commodity prices will remain with a negative bias. Gold is expected to continue to decline under the 1300 level this week. As the day progresses, gold could extend its climb on the anticipation of strong economic data in Europe. Europe and Germany will release PMI numbers which are expected to improve could support euro and pressurize dollar. From the US, ISM non-manufacturing number is likely to improve and could support the dollar. Trades may see gold up in the early part of the European session and decline after US data releases.

Industrial metals prices reached its highest price in more than a week on Friday as the dollar fell and after data showed slightly stronger than expected factory activity in big metals consumer China. Silver gained 31 pips this morning to trade at 19.943 while copper eased after a strong close on Friday. Copper is trading at 3.160 down by 8 pips in the Asian session. Hedge funds and money managers nearly doubled their net shorts in copper futures and options in the week to July 30, while they trimmed net longs in gold, a report by the Commodity Futures Trading Commission showed on Friday. Copper reached its highest price in more than a week on Friday as the dollar fell and after data showed slightly stronger than expected factory activity in big metals consumer China. The gains were capped by caution on the U.S. growth outlook after mixed jobs figures. The jobs data led to a broad fall in the dollar against the euro and the yen. A weaker dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies.

Strong US Data Weighs On Gold

Strong US Data Weighs On Gold
Strong US Data Weighs On Gold
Gold eased in the Asian session to trade at $1305.65 as it continues its slow downtrend. Gold is expected to break below 1300 if the results of the nonfarm payroll release today are above expectations. Gold fell a sixth day in the longest run of losses since May, heading for the first weekly decline in a month, as  U.S. economic data backed the case for less stimulus. Gold prices were higher Thursday mid-day as the first day of the month brings some larger, institutional investors back to the market and traders continue to adjust their expectations in the wake of the Federal Reserve’s policy statement. Gold for December delivery, the most actively traded contract, was recently up $6.40, or 0.5%, at $1,319.40 a troy ounce on the Comex division of the New York Mercantile Exchange but eased before the close to $1308.80 after the release of US data.

Yesterday data showed that US Unemployment Claims declined by 19,000 to 326,000 for the week ending on 26th July as against a rise of 345,000 in prior weeks. Manufacturing Purchasing Managers’ Index (PMI) rose by 0.5 point 53.7-mark in July from 53.2-level in June. The Institute for Supply Management (ISM) Manufacturing PMI increased by 4.5 points to 55.4 mark in July as compared to 50.9-level a month ago.  Strong US data helped push the US dollar to trade above a weekly high. The DX peaked close to 82.5.

SPDR gold holdings dropped by 0.7 percent in yesterday’s trade and stood tons lowest level since February 2009 exerted downside pressure on prices.  However, upbeat global markets cushioned sharp fall in the prices. The yellow metal touched an intra-day low of $1307.09 and closed at $1308.80 in the yesterday’s trading session.

Industrial metals prices rose to their highest level in a week yesterday following upbeat Chinese and European manufacturing data, and with a dovish Federal Reserve statement sparking hope of a delay in paring U.S. stimulus measures. Copper is trading at $3.15 down by 8 pips while silver eased below $20 to trade at $19.57.

On Thursday copper prices rallied to their highest level in nearly a week on Thursday after an unexpected increase in Chinese manufacturing activity and stronger euro-zone factory data bolstered the market’s demand outlook. Copper for September delivery, the most-actively traded contract, was recently up 6.75 cents, or 2.2%, at $3.1860 a pound on the Comex division of the New York Mercantile Exchange.