The market place this week is subjected to less risk aversion, as evidenced by moves to record or multi-year highs in the U.S. stock indexes, put downside price pressure on the metals Thursday. According to Forbes, a firmer U.S. dollar index that hit a four-week high Thursday, and lower crude oil prices were also bearish forces outside of market working against the all of the metals yesterday as well.
Gold retreats from five-week low
According to Bloomberg, gold futures increased from its five-week low in New York amidst speculation that selling will be discouraged by prices near a technical level. The metal, near its 200-day moving average, dropped 28 percent last year on expectations that the Federal Reserve would tighten monetary policy.
James Steel, an analyst at HSBC Securities Inc., said in a note yesterday, "The next level of support for gold may be the 200-day moving average. A break below this level may introduce selling by momentum investors," according to Bloomberg.
Spot gold was last quoted down $14.00 at $1,290.50.
U.S. equities peaked after data showed jobless claims decreased and global manufacturing increased. As a result, bullion dropped as much as 1.3 percent to $1,289.40 an ounce yesterday, the lowest since June 19.
Gold for December delivery was up 0.4 percent to $1,297.40 on the Comex in New York, while prices declined 1 percent this week, reports Bloomberg.
A monthly loss is expected for the metal despite ongoing unrest in Ukraine and the Middle East.
Silver prices climb
Silver prices moved up by 0.82 per cent to Rs 44,900 per kg in futures trade today amidst a firming trend overseas influencing positions created by investors. Silver also added 83 points to trade at 20.498 as traders bought up the cheap commodity
Silver contracts for September delivery traded at $20.515 per troy ounce, up 0.49 percent, the daily low. The contract dropped 2.76 percent on Thursday, and was down 2.2 percent for the week, reports the Economic Times.
Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at this week's high of $21.21 an ounce and the next downside price breakout objective for the bears is closing prices below major support at $20.00. The first resistance is read at $20.70 and then at Thursday's high of $21.00, reports Forbes.
Silver for delivery in December was up by Rs 364, or 0.82 per cent, to Rs 44,900 per kg in business turnover of 140 lots. According to Bloomberg, the white metal is set for a second weekly drop.
Copper futures slip
Copper futures for December fell 0.03 percent, trading at $3.2655 per pound. The contract rose about 2.5 percent for the week and added 1.86 percent on Thursday, reports the Binary Tribune.
Vivienne Lloyd, base metals analyst at Macquarie, said for Reuters, "We had a good day yesterday on the back of Chinese PMI data, which boosted all the base metals. Today is about consolidating gains for copper. Copper had a strong day yesterday but is more muted today. It's encountering resistance and I'm not sure the fundamentals are strong enough to push it through," according to the Binary Tribune.
HSBC released a preliminary reading on Chinese manufacturing PMI for July, logging the figure at its highest standing in 18 months at 52.0, well ahead of expected 51.0. Anything above 50 signals an expanding sector while figures below mean contraction. The higher the margin from 50, the faster the pace of either expansion or contraction.
Forbes reports that copper bulls' next upside breakout objective is pushing and closing prices greater than the solid technical resistance at the July high of 329.45 cents. The bears' next downside price breakout objective is closing prices underneath the solid technical support at the July low of 317.55 cents.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.