Gold & Silver; (Weekly) Debt Ceiling & Data Dependent week
Expect a busy start to the week as we enter the new quarter with higher volatility. Most traders have stayed on the side line throughout last week as they digest the latest economic and political development. October brings various volatile scenarios on the table and the economic calendar is filled with many market moving data. Talks of tapering continue to be data dependent and FOMC members have voiced their views that it is still possible to taper this month. The other headline news is the possibility of a new Fed chairman to replace the outgoing Mr Bernanke. Current favourite to win the seat is still Miss Yellen who will remain dovish. Meanwhile, debt ceiling wrangle between the democrats and republicans is set to go underway with tough negotiation but most analysts felt that the ceiling will be raised. Deadline on the debt ceiling is the 17th October - Jack Lew states.
Economic
Data this week:
- Chinese Manufacturing PMI
- Australian Interest rate decision
- Eurozone Manufacturing PMI
- US ISM Manufacturing PMI
- US ISM non-manufacturing
- US Non-farm payroll
- US Unemployment rate
Gold Technical Outlook
Weekly
Chart
Weekly
gold chart from (16th
to 23rd
September) have a close at $ 1324 level with long wicks at both ends
of the doji pattern. The close from last week marks an important
level despite the lack of interest from either camp. Price action
continues to trade below 20 DMA which has been acting as both support
and resistance. Other support level stands at $ 1305 and $ 1291 level
while the key support for this corrective move to sustain stands at $
1277 level. Only a break and close below $ 1277 will spell more
bearish move. Meanwhile, the upside rally remains capped with the
on-going taper talks among FOMC members. Despite weakness in the
dollar index, gold failed to capitalise and beset by a stronger
equity market. Technically, the price action is contained within the
symmetrical triangle pattern. Further pullback is in favour should it
break below the rising trend line. Otherwise, we continue to see
range trading within the converging Bollinger band. RSI has failed to
cross above the resistance level at 50 while the stochastic is
meandering sideways.
| Resistance: $ 1434, $ 1455, $ 1525 Support: $ 1278, $ 1210, $ 1180 |
Traders
Notes: Short only if it break $ 1290 level.
Going long on a break above $ 1380 - the target will be previous
high.
| Short Term (1 - 3 weeks) | Medium Term (1 - 3 months) | Long Term (6- 12 months) |
| Mildly bullish - $ 1348 | Bearish - $ 1215 | Target $ 1500 / $ 1600 |
Silver Technical
Outlook
Weekly
Chart
We
continue to see bearish momentum on the white metal with a target
below $ 20.00 level. Upside surprises might come in the form of a
weaker dollar index and rising gold prices due to on-going wrangle in
US debt ceiling. The converging Bollinger band will act as target on
the weekly chart and we continue to argue that the upside looks
capped. The MACD histogram has started to head lower while the RSI at
50 areas might act as resistance again.
| Resistance: $ 23.45, $ 23.90, $ 24.53 Support: $ 21.40, $20.80, $ 19.50 |
Traders
Notes: Short on a break and close below $ 20.80 level to target $
18.55 level. Long only if it can break beyond $ 23.95 to target $
26.65 area.
P.S. Will be away for the next two weeks no report
| Short Term (1 - 3 weeks) | Medium Term (1 - 3 months) | Long Term (6 - 12 months) |
| Possible retest of $ 20.60 area | Bearish $ 20.00 area | Bullish - a potential bull run? |
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30 Sep 2013
