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Market sentiment continued to deteriorate markedly although G-20 pledged to take coordinated actions to tackle global economic slowdown. Asian and European bourses slumped, following the selloff in US session yesterday. Oil price tumbled amid concerns over waning demand. The front-month contract for WTI crude oil extended weakness to as low as 78.15 after declining more than -6% yesterday. The equivalent Brent crude contract also plummeted below 104, the lowest in more than a month. In the precious metal complex, gold broke below 1700 for the first time since August 8. The metal has lost more than -7% over the past 2 days and has been down -12% from the record high of 1923.7 made on September 6. However, the selloff in platinum has been more severely. Gold's premium to platinum since the beginning of the month signaled the robust demand for safe-haven asset.
G-20 officials pledged after the conference that they were 'committed to a strong and coordinated international response to address the renewed challenges facing the global economy'. Speculations that ECB will cut interest rates increased after Governing Council member Luc Coene said that 'if the data in early October shows that things are worse than we anticipated we will look at the kind of decisions we have to take for that'. The ECB hiked interest rates twice this year to curb inflation. The rapid downturn in recent months, however, triggered commodity prices to fall from the peaks, thus taming inflationary pressures.
Gold-to-platinum ratio rose above 1 and stayed sustainably above there in early September. The trend has been rising since then, signaling the market remained concerned about global economic slowdown. As we mentioned in other articles, industrial demand makes up over 80% of total platinum demand (with autocatalytic demand taking up more than one-third of total demand) but it only accounts for around 10% of total gold demand. The 'industrial' characteristic in platinum makes its price movement more synchronized with stocks, oil and other 'higher risk assets'. Therefore, it tends to lose its glitter to gold during economic turmoil and uncertainty. On the contrary, gold is often considered as a store of value and a hedge against inflation. It's especially attractive when global central bankers are competing to devalue their countries' currencies so as to stimulate growth.
Gold's slide in recent days has been driven by the broadly based decline in market sentiment. However, the selloff in the near-term is not expected to derail the metal's long-term uptrend. In our opinion, as long as low rate environment persists and world central bankers expand measures to bolster the economy, buying interests in gold will emerge when there's correction.
Comex Gold (GC)
Gold's choppy fall from 1932.7 extends to as low s 1722.3 so far and further decline could still be seen. But after all, such decline is still viewed as the third leg of the consolidation pattern from 1917.9. Hence, we'd expect strong support from 1705.4 to contain downside and bring rebound. Above 1819.4 will flip bias back to the upside for 1923.7 and above. However, sustained break of 1705.4 will invalidate out view and turn outlook bearish.
In the bigger picture, firstly, gold's long term up trend is still intact and there is no signal of reversal yet. Another record high should still be seen. But we'll be cautious on another near term reversal near to 2000 psychological level and finally bring some lengthier consolidation. Meanwhile, a break of 1705.4 will argue that gold has indeed topped out with a double top reversal pattern (1917.9, 1923.7) and in such case, deeper pull back could be seen back towards resistance turned 1577.4 support instead.
Comex Gold Continuous Contract 4 Hours Chart
Crude oil drips further to as low as 79.66 so far and intraday bias remains on the downside for 75.71 support first. Break will confirm resumption of the whole decline form 114.83 and should target 70 psychological level and then 100% projection of 100.62 to 75.51 from 90.52 at 65.60. On the upside, above 82.21 minor resistance will turn bias neutral and bring consolidations. But recovery should be limited by 4 hours 55 EMA (now at 85.68) and bring fall resumption.
In the bigger picture, medium term rebound from 33.2 is treated as the second leg of consolidation pattern from 147.24 and should have finished at 114.83 already. Current decline should target next key cluster support at 64.23 (61.8% retracement of 33.2 to 114.83 at 64.38) next. Sustained break will pave the way to retest 33.2 low. However, break of 100.62 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 for another high above 114.83.
Nymex Crude Oil Continuous Contract 4 Hours Chart
alamak !!
Veri Veri strong resistance broken ... ...
BUT could eye golden opportunity to load at $2.96 :))
krisluke ( Date: 12-Sep-2011 20:10) Posted:
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Gold Daily Technical Outlook
Comex Gold (GC)
Gold's choppy fall from 1923.7 is still in progress and there's no change in outlook. Such decline from 1923.7 is treated as either consolidation to rise from 1705.4 or the third leg of the consolidation pattern from 1917.9. In either case, we'd expect strong support above 1705.4 to contain downside and bring up trend resumption. Above 1923.7 should in turn send gold towards 61.8% projection of 1478.3 to 1917.9 from 1705.4 at 1977.1.
In the bigger picture, firstly, gold's long term up trend is still intact and there is no signal of reversal yet. Another record high should still be seen. But we'll be cautious on another near term reversal near to 2000 psychological level and finally bring some lengthier consolidation. Meanwhile, a break of 1705.4 will argue that gold has indeed topped out with a double top reversal pattern (1917.9, 1923.7) and in such case, deeper pull back could be seen back towards resistance turned 1577.4 support instead.
Comex Gold Continuous Contract 4 Hours Chart
Crude Oil Daily Technical Outlook
Nymex Crude Oil (CL)
Crude oil's fall fro 90.52 continues as expected and reaches as low as 82.92 so far today. As noted before, choppy rebound from 75.71 should have completed at 90.52 already. Decline from 114.83 is possibly ready to resume. Intraday bias remains on the downside for retesting 75.71 low first. On the upside, break of 90.52 is needed to confirm resumption of rebound form 75.71. Otherwise, we'll stay cautiously bearish now.
In the bigger picture, medium term rebound from 33.2 is treated as the second leg of consolidation pattern from 147.24 and should have finished at 114.83 already. Current decline should target next key cluster support at 64.23 (61.8% retracement of 33.2 to 114.83 at 64.38) next. Sustained break will pave the way to retest 33.2 low. However, break of 100.62 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 for another high above 114.83.
Nymex Crude Oil Continuous Contract 4 Hours Chart
Little volume means the big funds are having 'tea-break'...
But anyway, generally speaking, volume doesn't really do any
good in terms of predictive value, since there are
always two sides of the coin (buyers/sellers).
Price action itself is good enough
for betting purposes...
krisluke ( Date: 22-Sep-2011 00:07) Posted:
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2. reduction in crude inventory
I was right on reduction in crude inventory announce by EIA every wed night (singapore time) but ....
the world is waiting for QE3 (injection of $$$$ will boost commodities price thus lowering the value of green backs)
The real test will be economy outlook.
OR take a look on the upcoming winter season.... ....
Do watch SAR too
krisluke ( Date: 20-Sep-2011 22:36) Posted:
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South America.. Is it brasil?
Crude oil = USD 90.52 for upside rebound... ...
resistance @ $3.86
veri veri strong support @ $3.60
Do note that the 9day ema and 14 day ema PLUS 20 day sma were forming a straight line... ...
It could indicate a technical rebound soon :)
GuavaXF30 ( Date: 21-Sep-2011 08:20) Posted:
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Now every small rally is worth a short
GuavaXF30 ( Date: 21-Sep-2011 08:20) Posted:
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Interesting story today re South American investment in off-shore oil drilling. Recent past shows big beneficiaries were Keppel Corp and SML. All SML needs now is an award of a oil-rig contract for the price to shoot past 4.00 again.
Oil price will not likely fall below US80. Not even with recession. China's energy requirement will make sure of that. Unless, the world goes back to the dark ages.....
krisluke ( Date: 20-Sep-2011 23:12) Posted:
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