The Overall Fundamentals

Gold finishes lower on profit taking, Silver dips too.

Gold futures on the COMEX Division of the New York Merc finished lower Wednesday, as players opted to cash in their profit after the precious Yellow metal postd a string of fresh record highs in recent sessions.

The most active Gold contract for August delivery fell 1.7, or 0.1%, to 1,615.1 oz.

Gold Wednesday saw the 1st decline after marking a fresh the record high at 1628.8, before that, the precious Yellow metal has risen for 3 consecutive trading days.

Market analysts attributed the mild weakness to profit taking by market players.

Gold was pressured by a rising USD Wednesday, which prompted some players to book profits. The Dollar Index, which measures the USD against a basket of 6 currencies, rose 0.78% to 74.1.

The prolonged stalemate over increasing the US debt ceiling helped limit the losses in the Gold pit, as US lawmaker impasse continues Gold will remain supported until there is some resolution on this debt issue IMO.

Silver for September delivery dipped 0.13, or 0.3%, to 40.568 oz. and Platinum for October delivery gained 0.80, or 0.04%, to 1808 oz.

Crude Oil declines on rising inventories
Crude Oil prices declined Wednesday as US Crude Oil inventories rose last week and concerns over deadlocked US debt ceiling talks lingered.

WTI the US Crude benchmark fell after the Energy Information Administration reported that US Crude Oil stocks added 2.1M bbls in the week ended July 22 as imports rose and demand from refineries declined, breaking the decline streak of 7 straight weeks. Meanwhile, Gasoline inventories gained 1.0M bbls.

The USD recovered and rose 0.8% after earlier selling-off against a basket of currencies, adding pressure to Crude Oil prices.

Light, Sweet Crude for September delivery fell 2.19, or 2.20% to finish at 97.40 bbl on the New York Merc. In London, Brent Light Crude for September delivery dipped 0.85, or 0.72% to close at 117.43 bbl.

The Overall Technicals

Comex Gold (GC)

Gold rose to new record high of 1625.8 and remains firm.

Bias is to the Northside for 1.8% projection of 1309.1 to 1577.4 from 1478.3 at 1644.1 next.

On the Downside: a clear break of 1581.1, the Key support, is needed to signal a short term Topping. Barring that, I am Bullish even in case of a pullback.

The Big Picture: Gold's up-trend from the Y 2009 low of 681 is in progress, and should target 161.8% projection of 1155.6 to 1432.5 from 1309.1 at 1757.1 next. Stay tund...

Comex Silver (SI)

Silver's rally from 33.38 is still on. The intra-day bias remains on the Northside for 61.8% retracement of 49.82 to 32.30 at 43.125 and above.

On the Downside: a clear break below 38.21, Key support, is needed to signal short term Topping. Barring that, I am Bullish on Silver.

The Big Picture: Silver's price actions from 49.82 are treated as consolidation pattern in the long term up-trend. The first leg from 49.82 should have completed at 32.30 after drawing support from 50% retracement of 14.65 to 49.82 at 32.23. The rise from 32.30 is treated as the 2nd leg, and could now be heading to 61.8% retracement of 49.82 to 32.30 at 43.13 and higher. But, strong resistance is expected at just below 49.82 and should bring on a reversal, then there should be another fall to 32.30, and possibly below before the consolidation from 49.82 finishes. Stay tuned...

Nymex Crude Oil (CL)

There is no change in Crude Oil's outlook.

The recovery from 89.61 is still in progress, and a further rise should be seen towards 102.44, the Key resistance, which is close to 50% retracement of 114.83 to 89.61 at 102.22.

A clear break of 102.44 is needed to confirm completion of the fall from 114..83. Otherwise, another decline is still in favor.

A break below 94.74 will turn the bias back to the Southside for 89.61 and then to the Key cluster support at 83.65/85. But, sustained trading above 102.44 will confirm completion of the 3 wave correction from 114.83 and should set the way for a retest of the 114.83 high.

The Big Picture: the medium term rebound from 33.2 is treated as the 2nd leg of consolidation pattern from 147.24, and failed 100% projection of 33.2 to 89.35 from 64.23 at 114.98. So, the focus is next Cluster support at 83.85, 61.8% retracement of 64.23 to 114.83 at 83.65, 38.2% retracement of 33.2 to 114.83 at 84.10. A clear break there confirms the case of a medium term reversal, and turn outlook Bearish for 64.23 support and below. But, a Strong rebound above this Cluster support mark will regain the medium term Bullish outlook, and bring another rise to above the 115 mark before a reversal. 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.