Market Commentary
Ø Gold opened lower
today after selling off a bit overnight as investors seem to be moving their
money out of gold in favour of other asset classes. The metal opened at
1690.25/1691.25, quickly hitting its low of 1690.00/1691.00 to then start on a
relatively steep ascent to reach a high of 1699.00/1700.00. Gold then traded in
narrow bands for the rest of the day, despite surging equities and a weak dollar
suggesting investor indecision and a breakdown in correlations.
Ø Silver too remains range bound ahead of the holiday season and
looming fiscal cliff issue opening virtually unchanged from Friday’s close at
32.16/32.21, moving up rapidly to its daily high of 32.36/32.41 and then
gradually deteriorating. The commodity hit a low of 32.00/32.05 just after 10am
to close at 32.20/32.25.
Technical
Commentary
Ø Gold closed lower today at 1696. The last signal in MACD remains a
sell and the downtrend does not yet show signs of abating. The ADX (from the
Directional Movement Index) is at 22 indicating the trend remains strong. The
downward-sloping neckline of a potential head-and-shoulders pattern would come
in around 1673, and the long term uptrend is not far away at 1658. A break of
the neckline would target the low 1600’s which would breach the uptrend support.
Resistance is at 1723, the high from December 12th.
Ø Silver closed lower at 32.20. The last MACD signal was also a sell
but the trend is much weaker than that for gold, with the ADX below 20
(currently at 15.96). A small head-and-shoulders pattern with a neckline at
32.78 targets $2 lower. This would take us back to November lows in the $30.68
area, which could be fulfilled without breaching the long-term uptrend which
comes in around 28.59. The gold-silver ratio is trading higher at 52.72.
Resistance is at 54.59, the November high, and support is at 50.26, the November
low.
Technical levels for 18th Dec,
2012:
|
Metal
|
Support ($/oz)
|
Resistance ($/oz)
|
|
Gold
|
1690.50
|
1705.40
|
|
Silver
|
31.987
|
32.688
|
Economic
Calendar:
|
Date
|
Economic
Indicator
|
Country
|
Actual
|
Forecast
|
Previous
|
Effect
& Remarks
| ||
|
18th Dec
|
Current Account
|
US
|
Pending at 7:00pm
|
-105B
|
-117B
|
If Actual > Forecast = Good for currency. Difference in value
between imported and exported goods, services, income flows, and unilateral
transfers during the previous quarter
| ||
|
17th Dec
|
Empire State Manufacturing Index
|
US
|
-8.1
|
-0.7
|
-5.2
|
As Actual < Forecast =Not Good for currency. Level of a
diffusion index based on surveyed manufacturers in New York state has Decreased.
| ||
|
17th Dec
|
TIC Long-Term Purchases
|
US
|
1.3B
|
24.3B
|
3.3B
|
As Actual < Forecast =Not Good for currency. Difference in
value between foreign long-term securities purchased by US citizens and US
long-term securities purchased by foreigners during the reported period has
Decreased.
| ||
|
17th Dec
|
FOMC Member Lacker Speaks/Stein
Speaks
|
US
|
NA
|
Lacker: Economic Outlook, December
2012
Stein:
I will focus my remarks on one important aspect of this issue--namely, the
growing use of wholesale dollar funding by global financial
institutions.
| ||||
Disclaimer:
-
This report contains the opinion of the
author, which is not to be construed as investment advices. The author,
Directors, other employees of RiddiSiddhi Bullions Ltd. and its affiliates
cannot be held responsible for the accuracy of the information presented herein
or for the results of the positions taken based on the opinions expressed above.
The above-mentioned opinions are based on the information, which is believed to
be accurate, and no assurance can be given for the accuracy of the information.
The author, directors and other employees and any affiliates of RSBL cannot be
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