The Commodities Report: Precious Metals and Energies
Crude Oil finished lower by 1.1% at 95.74 bbl. Futures rallied following this morning's inventory data, which showed a draw down versus expectations for a build.
Despite trading into positive territory, and marking a high at 97.84, the weakness in equities and strength in the USD proved too much for prices.
Crude Oil sold off back into negative territory to close at levels seen in overnight trade. Crude Oil finished lower for the 1st time in 6 sessions.
Nat Gas ended lower by 2.4% at 3.65 per MMBtu. Futures put in session lows at$3.65 and traded around those lows for most of the session.
It was a quiet afternoon for the precious metals. Gold prices finished off 0.4% to close at 1791.60, and Silver prices finished down 2.2% at 34.36 oz. Both metals are adding to their losses in after market electronic trade.
Gold Market Recap
Dec Gold managed to respect the recent pattern of higher lows on the charts Wednesday, but concerns of a return to widespread Global de-leveraging undermined Gold during the session, especially with the mainstream media noising over the slightest developments from the Italian situation.
Perhaps Gold was partially undermined by news that Greece had finally selected a new Prime Minister (but in fact had not), that news did not seem to have much of an impact on other financial markets.
The Gold price finished off 0.4% to close at 1791.60
Silver Market Recap
The Silver market looked like it was shifting back to a physical commodity market Wednesday as residual concern toward EuroZone debt issues weighed on Silver instead of supporting Silver prices.
But, on the news that Greece had finally picked a successor Prime Minister (that is still a question) the Silver market remained under pressure, and that pointed to a flight to quality bias.
In the end, Silver and other physical commodity markets came under pressure Wednesday because of growing fears of a return to a Global recession possibly.
Silver prices finished pit trade down 2.2% at 34.36 oz.
Red's Gold's Daily Technical Outlook
Comex Gold (GC)
Gold's rally from 1515 is still in progress, and tapped 1804.4, and so far breaking 61.8% retracement of 1923.7 to 1535 at 1775.2.
I see a further rally as long as 1749.8, the minor support, holds and Gold will possibly target 161.8% projection of 1535 to 1696.8 from 1604.7 at 1866.5.
But, considering mild Bearish divergence condition in 4 hrs MACD, a break of 1749.8 argues that whole rebound from 1535 is finished, and will turn my bias back to the Southside for 1604.7, the Key support, for confirmation.
The Big Picture: Gold is inside long term rising channel from 681 and above 55 wks EMA at 1548.2 and so, the longer term outlook remains Bullish. Strong support is seen inside 1478.3/1577.4, the Key support zone, as I expected. This current rebound from 1535 might now extend further to retest 1923.7 high first.
A clear break there confirms the up-trend resumption, but, a failure below 1923.7 will bring another fall to extend the consolidation between 1478.3 and 1923.7. Stay tuned...
Red's Silver Daily Technical Outlook
Comex Silver (SI)
Silver continues to struggle around its 55 days EMA but with 32.10, the minor support intact, further upside is expected in Silver.
The choppy look in the price actions since 26.15 is starting to tell me that it is just a correction, and I will be cautious on Strong resistance from 61.8% retracement 44.275 to 26.15 at 37.35 to limit any upside, and bring on a reversal. A break below 32.10 will likely bring a retest on 26.15, the recent low.
The Big Picture: this development here suggests that correction from 49.82 might have completed with 3 waves down to 26.15, after a brief break of 26.30 support. It is too early to confirm the up-trend's resumption. But I will continue to stay cautiously Bullish as long as 29.935, the Key support holds.
Sustained trading above 55-Days EMA, now at 34.88, should show the way back to 44.275, the Key resistance. A clear break there targets a new high above 49.82. But, a clear break of 29.935 will turn focus back to 26.15, the Key support instead. Stay tuned...
Red's Crude Oil Daily Technical Outlook
Nymex Crude Oil (CL)
Crude Oil rose to 97.32 on weak momentum, but a further rally is expected as long as 93.23, the minor support, holds.
This rebound from 74.95 should target 100,the psych mark, which is close to 61.8% retracement of 114.83 to 74.95 at 99.60 and 100.62 resistance.
I am cautious of the Strong resistance, and expect a Key reversal signal as it approaches 100.
On the Downside: a break below 93.23 indicates a short term topping, lwith Bearish divergence condition in 4 hrs MACD, and Crude Oil should then drop through 89.17, the Key support, at least.
The Big Picture: the choppy corrective structure indicates that price actions from 114.83 are a correction, or part of a consolidation pattern to decline from 114.83. Such a decline should have completed at 74.95 after being supported above 50% retracement of 33.2 to 114.83 at 74.02.
That means that the rise from 33.2 is not finished, and sustained trading above 100, psych mark, will affirm this, and will likely send Crude Oil through 114.83, its recent high.
On the Downside: a break of 74.95, Key support, will revive the case that rise form 33.2 has finished at 114.83 and will turn outlook Bearish. Stay tuned...
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.