The Overall Fundamentals
Gold and Silver
Gold futures on the COMEX Division of the New York Merc finished higher Wednesday, fueled by demand for physical Gold remaining Strong in Asia and Europe.
The most active Gold contract for Dec delivery rose 1.9, or 0.1%, to 1,831.7 oz.
Traders expect Gold buying to regain momentum in September, as an upcoming festival, wedding season in India, and a week-long holiday in early October in China will likely boost demand for physical Gold.
It looks to me like many traders are staying on the sidelines of the Gold market, as the upcoming US manufacturing and employment reports, which are expected to reveal more signs of the state of the US economy, will be Key drivers of investor sentiment on Thursday and Friday of this week.
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The US Commerce Department said July factory orders rose 2.4%, better than the 1% decline that economists forecast.
US stocks rallied for a 4th session running Wednesday, as economic reports illustrated a better August than players expected.
A trader mentioned after the cose that the Strong rally in US equity markets caused some investors to take profits in the Gold market limiting Gold's gains Wednesday.
Silver for Dec delivery added 0.304, or 0.7 percent, to 41.768 oz. and Platinum for Oct delivery rose 3.1, or 0.2%, to finish at 1,856.2 oz.
Crude Oil edged down on inventories rise. US Crude Oil price fell Wednesday as US Crude Oil inventories increased sharply last week, but better-than-expected economic data limited the loss.
US Crude Oil price turned negative after US Energy Information Administration reported US Crude Oil stocks added 5.3-M bbls in the week ended August 26 as import rose while demand from refineries fell. The build was beyond a forecast of 400-K bbl rise.
The report also showed that the Gasoline inventories fell 2.8-M bbls last week, which limited Crude prices losses.
WTI Light, Sweet Crude for Oct. delivery fell 0.09, or 0.10% to settle at 88.81 bbl on the New York Merc, after trading in a range of 87.67 to 89.54 on the session.
In London, Brent Crude Oil for Oct delivery rose and last traded above 114 bbl as Libya's Crude Oil production was expected to be absent for some time to come. Brent is heading for its 9th consecutive gaining session.
The Overall Technicals
Comex Gold (GC)
With 1766.4, the minor support, intact, Gold's rebound from 1705.4 is favored to continue North. I do expect Strong resistance at around 1917.9 to limit the upside and bring another fall to continue the consolidation. A clear break below 1766.4,the minor support, turns the bias back to the Soouthside towards 1705.4, Key support, and possibly below, and a clear break of 1917.9 targets 2000, the psych mark, next.
The Big Picture: with the daily MACD crossed below Signal line, a short term Top is formed at 1917.9 in Gold IMO. But there is no sign of trend reversal in here. The price actions from 1917.9 are expected to develop sideway consolidations for a while.
Note: 1st, any consolidation should be contained well above 1577.4 resistance turned support, and 2nd , Strong resistance might be seen from 2000, the psych mark, in the near term in case of a rally attempt. Gold could trade between 1600-2000 for a while. Stay tuned...
Comex Silver (SI)
Intra-day bias in Silver remains Neutral in here.
On the Downside: a clear break below 40.12, the minor support, augurs that the recovery from 38.76 is finished and turns the bias back to the Southside. A break of 38.76 extends the fall from 44.275 towards 37.025 and break there says that whole rebound from 33.20 is finished, and should bring on a deeper decline towards 32.30/33.38 support Zone.
On the Upside: a break above 41.80 will bring on another rise towards 44.275 and possibly above.
The Big Picture: Silver's price actions from 49.82 are treated as consolidation pattern in the long term up- trend. The 1st leg from 49.82 finished at 32.30. The rise from 32.30 is treated as the 2nd leg and may extend further, but I will look for reversal signal as it approaches 49.82, and a break of 37.025, the Key support, turns my outlook Bearish for another falling leg to extend the consolidation.
Barring a sustained break of 37.025, I am staying cautiously Bullish Silver in the near term. Stay tuned...
Nymex Crude Oil (CL)
Crude Oil's choppy recovery extends further by taking out 89.00, the resistance, and reached as high as 89.21 Wednesday.
Intra-day bias is back on the upside, and further rise could be seen.
The focus is now on 89.61, support turned resistance, I will stay Bearish as long as this resistance holds and expect reversal soon.
A break Below 82.95 will turn the bias back to the Southside to 75.71, Key support, 1st. A clear break there will resume whole decline from 114.83 towards 70, the psych mark. But, sustained trading above 89.61 augurs that the near term trend in Crude Oil may have reversed, and bring on a stronger rebound towards 100.62, the Key resistance, instead.
The Big Picture: the medium term rebound from 33.2 is treated as the 2nd leg of consolidation pattern from 147.24 and should have finished at 114.83. This decline should target the next Key cluster support at 64.23; 61.8% retracement of 33.2 to 114.83 at 64.38 next. A clear break there shows the way to retest 33.2, the low. But a clear break of 100.62, the Key resistance, will indicate that fall from 114.83 has completed after meeting missing 100% projection target. The corrective structure of such decline in turn argues that rise from 33.2 is still in progress and look for another high above 114.83. Stay tuned...
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.