Crude oil price changes little in European session as the market awaits the report by the US energy Department. Although probable decline in crude inventory supports price, firmness in USD and retreat in stock markets limit oil's gain. Currently trading at 78.88, the benchmark contract is largely flat from Tuesday's close.
Gold continues trading below 1100 as the dollar looks well-supported. In the near-term, the yellow metal's outlook is bearish but investors seem to remain optimistic on its long-term prospect.
Gold holdings in ETF Securities rose +0.4% to 7.8M oz yesterday from a day ago. At the same time, holdings in the SPDR Gold Trust also increased +0.1% to 36.4M oz yesterday.
The greenback is trading particularly strong against the yen as rate differential between the 2 countries is prone to widen if the Fed withdraw the easing measures. USDJPY rises to 92.2, approaching a 2-month high made in mid-October. Moreover, the dollar stays strong against the single currency - euro- and is set to record its first monthly gain since July.
After downgrades of Greece and Spain, the Wall Street Journals quoted the European Commission's warning that public finances in half of the 16 Eurozone nations are at high risk of becoming unsustainable. Ireland and Portugal are facing imminent risk of being downgraded as their financial conditions are worrying.
Equities in Asia and Europe pull back as affected by overnight retreat in the US market. In Asia, the MSCI Asia Pacific Index slid -0.5%. Japan's Nikkei 225 Stock Average lost -0.9% to close at 10546 as led by the slump of Japan Airlines which is on the verge to bankruptcy. In Europe, the UK's FTSE 100 Index dips -0.3% after soaring for 5 days and reaching a 15-month high at 5445.2 yesterday. Other European stock indices also fall with both of Germany DAX and France's CAC 40 losing around -0.7%.
Committments of Traders:
Crude Oil: Net speculative long positions surged more than +20K to 75.3K. The rise was in tandem with price the rally which was driven by huge inventory draw
Natural Gas: Net speculative short positions increased although gas price advanced to the highest level since January 2009. There's risk for further increase in net shorts in coming weeks should weather in the Midwest and Northeast turn moderate as gas storage remains at record high level
Gold: Net speculative long positions declined to 238K last week as plummeted to the lowest in 7 weeks. As speculative length stays at record high level, long liquidation will continue in coming weeks. Moreover, strength in USD should weigh on the yellow metal
Silver: Net speculative long positions rose after dropping for 4 consecutive weeks. Surge in new longs in spite of slide in silver price increased the rise of long liquidation in coming weeks
Platinum: Net speculative long positions declined for the 3rd consecutive weeks. Rebound may see in the coming week as price recovers strongly after both the US and Japan released encouraging auto sales data.
Distillate Rallied amid Inventory Draw:
Heating oil outperformed crude and gasoline Tuesday as inventory drew significantly and cold weather in Northern hemisphere might accelerate fuel consumption. The benchmark contract rose to 2.1177, the highest in 9 weeks, before settling at 2.1028 (+1.4%). The intra-day high was just 1 cent below the 2008- high at 2.1289 (October 21). Whether it will break on the upside or retreat highly depends on EIA's report today.
Rise in crude oil moderated as it approached 80. The February contract, while gaining for the 4th consecutive day, edged only +0.1% to close at 78.87 Tuesday. Gasoline, however, fell -0.4% to 2.0106 despite the decline in stockpile.
The industry-sponsored API reported that crude oil inventory rose +1.7 mmb in the week ended December 25. Although imports stayed low, low refinery runs continued let inventory idled. Refinery runs dropped -0.62 mmb as producers lacked incentive and preferred to dispose the ample fuel stockpiles first.
Distillate stockpile surprisingly drew -3.5 mmb of which heating oil dropped -2.6 mmb. Distillate crack widened to 9.45 on December 29 from 7.44 in the prior week as investors speculate cold weather will persist and stimulate demand. Gasoline inventory also fell -1.4 mmb but the market had shifted focus to the huge draw in distillate inventory. Moreover, MasterCard's report showed that US gasoline demand plummeted the most in 5 months due to snowstorms. According to the report, consumption was down -3.3%, the sharpest fall since July 10, from a week ago.
The US Energy Department will probably report a -1.85 mmb decline in crude oil inventory and -2.23 mmb decline in distillate inventory. However, gasoline might have risen +1 mmb during the week.
Gold's rebound above 1110 may prove to be short-lived as USD has not yet finished its rally. The yellow metal for February delivery slid -0.9% to 1098.1 Tuesday. Today in Asia, the contract continues moving downward, it seems like another leg of decline is developing.
USD index rose +0.3% to 77.83 as house price index and consumer confidence index were largely inline with expectations.
GOLD :
DAILY PIVOT POINTS :R3) 1117.93 R2)1113.57 R1)1105.83 PP)1101.47 S1)1093.73 S2)1089.37 S3)1081.63 H)1109.20 L)1097.10 C)1098.10 DATED 12/29
WEEKLY PIVOT POINTS Gold R3)1170.93 R2)1145.87 R1)1125.33 PP)1100.27 S1)1079.73
S2)1054.67 S3)1034.13 H)1120.80 L)1075.20 C)1104.80 12/25 DATED 12/25
With 4 hours MACD turned negative, recovery from 1075.2 might have completed already after hitting 4 hours 55 EMA. Intraday bias remains neutral. Break of 1075.2 will indicate that recent fall from 1227.5 has resumed and should target 61.8% retracement of 931.3 to 1227.5 at 1044.4 next. On the upside, while another rise cannot be ruled out as consolidations from 1075.2 continue, another decline is still in favor as long as 1142.9 resistance holds
In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Deeper pull back could now be seen to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But downside should be contained well above 931.3 support and bring up trend resumption to another high above 1227.5.
SILVER :
DAILY PIVOT POINTS:Silver R3)17.875 R2)17.710 R1)17.410 PP)17.245 S1)16.945 S2)16.780 S3)16.480 H)17.545 L)17.080 C)17.110 DATED12/29
WEEKLY PIVOT POINT:Silver R3)18.495 R2)18.020 R1)17.730 PP)17.255 S1)16.965 S2)16.490 S3)16.200 H)17.545 L)16.780 C)17.440 DATED12/25
Intraday bias in Silver remains neutral for the moment and some more sideway trading cannot be ruled out. Nevertheless, even in case of another rise, upside is expected to be limited by 61.8% retracement of 19.50 to 16.78 at 18.46 and bring fall resumption. Break of 16.78 will target 16.12 support next.
In the bigger picture, rise from 12.435 should have completed at 19.50 on bearish divergence condition in daily MACD, after just missing 19.55/21.55 resistance zone. Break of 16.12 support will confirm this case and should target lower trend line support at 13.88 level. This will also be the another signal that whole medium term rise from 8.4 has finished too. Sustained break of the lower trend line support will confirm this medium term bearish case and bring further fall towards 8.4 low.
Also, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall.
CRUDE:
DAILY PIVOT POINTS:Crude Oil R3)80.87 R2)80.13 R1)79.50 PP)78.76 S1)78.13 S2)77.39 S3)76.76 H)79.39 L)78.02 C)78.87 DATED12/29
WEEKLY PIVOT POINTS:Crude Oil R3)85.49 R2)81.87 R1)79.96 PP)76.34 S1)74.43 S2)70.81 S3)68.90 H)78.25 L)72.72 C)78.05 DATED12/25
Upside momentum in crude oil remains unconvincing with 4 hours MACD staying below signal line. Bias remains neutral for the moment and some more sideway consolidation could be seen. But still, downside should be contained by 76.19 support and bring another towards 82.0 resistance. However, a break of 76.19 will argue that rebound from 68.59 has completed and deeper fall should then be seen to 71.21 support first.
In the bigger picture, the strong rebound from put crude oil back above 55 days EMA and dampens the bearish view that it has topped out at 33.2. We'll stay neutral for the moment with focus on 82.0 resistance. Break there will indicate that whole medium term rise from 33.2 is still in progress. Nevertheless, focus will remain on reversal signal as we'd expect such rise to conclude inside 76.77/90.24 fibo resistance zone.
Formula
Res3 = H + 2*(P-L)
Res2 = P + (Res1-Sup1)
Res1 = 2 * P - L
Pivot Point = ( H + C + L ) / 3
Sup1 = 2 * P - H
Sup2 = P - (Res1-Sup1)
Sup3 = L - 2*(H-P)
Gold continues trading below 1100 as the dollar looks well-supported. In the near-term, the yellow metal's outlook is bearish but investors seem to remain optimistic on its long-term prospect.
Gold holdings in ETF Securities rose +0.4% to 7.8M oz yesterday from a day ago. At the same time, holdings in the SPDR Gold Trust also increased +0.1% to 36.4M oz yesterday.
The greenback is trading particularly strong against the yen as rate differential between the 2 countries is prone to widen if the Fed withdraw the easing measures. USDJPY rises to 92.2, approaching a 2-month high made in mid-October. Moreover, the dollar stays strong against the single currency - euro- and is set to record its first monthly gain since July.
After downgrades of Greece and Spain, the Wall Street Journals quoted the European Commission's warning that public finances in half of the 16 Eurozone nations are at high risk of becoming unsustainable. Ireland and Portugal are facing imminent risk of being downgraded as their financial conditions are worrying.
Equities in Asia and Europe pull back as affected by overnight retreat in the US market. In Asia, the MSCI Asia Pacific Index slid -0.5%. Japan's Nikkei 225 Stock Average lost -0.9% to close at 10546 as led by the slump of Japan Airlines which is on the verge to bankruptcy. In Europe, the UK's FTSE 100 Index dips -0.3% after soaring for 5 days and reaching a 15-month high at 5445.2 yesterday. Other European stock indices also fall with both of Germany DAX and France's CAC 40 losing around -0.7%.
Committments of Traders:
Crude Oil: Net speculative long positions surged more than +20K to 75.3K. The rise was in tandem with price the rally which was driven by huge inventory draw
Natural Gas: Net speculative short positions increased although gas price advanced to the highest level since January 2009. There's risk for further increase in net shorts in coming weeks should weather in the Midwest and Northeast turn moderate as gas storage remains at record high level
Gold: Net speculative long positions declined to 238K last week as plummeted to the lowest in 7 weeks. As speculative length stays at record high level, long liquidation will continue in coming weeks. Moreover, strength in USD should weigh on the yellow metal
Silver: Net speculative long positions rose after dropping for 4 consecutive weeks. Surge in new longs in spite of slide in silver price increased the rise of long liquidation in coming weeks
Platinum: Net speculative long positions declined for the 3rd consecutive weeks. Rebound may see in the coming week as price recovers strongly after both the US and Japan released encouraging auto sales data.
Distillate Rallied amid Inventory Draw:
Heating oil outperformed crude and gasoline Tuesday as inventory drew significantly and cold weather in Northern hemisphere might accelerate fuel consumption. The benchmark contract rose to 2.1177, the highest in 9 weeks, before settling at 2.1028 (+1.4%). The intra-day high was just 1 cent below the 2008- high at 2.1289 (October 21). Whether it will break on the upside or retreat highly depends on EIA's report today.
Rise in crude oil moderated as it approached 80. The February contract, while gaining for the 4th consecutive day, edged only +0.1% to close at 78.87 Tuesday. Gasoline, however, fell -0.4% to 2.0106 despite the decline in stockpile.
The industry-sponsored API reported that crude oil inventory rose +1.7 mmb in the week ended December 25. Although imports stayed low, low refinery runs continued let inventory idled. Refinery runs dropped -0.62 mmb as producers lacked incentive and preferred to dispose the ample fuel stockpiles first.
Distillate stockpile surprisingly drew -3.5 mmb of which heating oil dropped -2.6 mmb. Distillate crack widened to 9.45 on December 29 from 7.44 in the prior week as investors speculate cold weather will persist and stimulate demand. Gasoline inventory also fell -1.4 mmb but the market had shifted focus to the huge draw in distillate inventory. Moreover, MasterCard's report showed that US gasoline demand plummeted the most in 5 months due to snowstorms. According to the report, consumption was down -3.3%, the sharpest fall since July 10, from a week ago.
The US Energy Department will probably report a -1.85 mmb decline in crude oil inventory and -2.23 mmb decline in distillate inventory. However, gasoline might have risen +1 mmb during the week.
Gold's rebound above 1110 may prove to be short-lived as USD has not yet finished its rally. The yellow metal for February delivery slid -0.9% to 1098.1 Tuesday. Today in Asia, the contract continues moving downward, it seems like another leg of decline is developing.
USD index rose +0.3% to 77.83 as house price index and consumer confidence index were largely inline with expectations.
GOLD :
DAILY PIVOT POINTS :R3) 1117.93 R2)1113.57 R1)1105.83 PP)1101.47 S1)1093.73 S2)1089.37 S3)1081.63 H)1109.20 L)1097.10 C)1098.10 DATED 12/29
WEEKLY PIVOT POINTS Gold R3)1170.93 R2)1145.87 R1)1125.33 PP)1100.27 S1)1079.73
S2)1054.67 S3)1034.13 H)1120.80 L)1075.20 C)1104.80 12/25 DATED 12/25
With 4 hours MACD turned negative, recovery from 1075.2 might have completed already after hitting 4 hours 55 EMA. Intraday bias remains neutral. Break of 1075.2 will indicate that recent fall from 1227.5 has resumed and should target 61.8% retracement of 931.3 to 1227.5 at 1044.4 next. On the upside, while another rise cannot be ruled out as consolidations from 1075.2 continue, another decline is still in favor as long as 1142.9 resistance holds
In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Deeper pull back could now be seen to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But downside should be contained well above 931.3 support and bring up trend resumption to another high above 1227.5.
SILVER :
DAILY PIVOT POINTS:Silver R3)17.875 R2)17.710 R1)17.410 PP)17.245 S1)16.945 S2)16.780 S3)16.480 H)17.545 L)17.080 C)17.110 DATED12/29
WEEKLY PIVOT POINT:Silver R3)18.495 R2)18.020 R1)17.730 PP)17.255 S1)16.965 S2)16.490 S3)16.200 H)17.545 L)16.780 C)17.440 DATED12/25
Intraday bias in Silver remains neutral for the moment and some more sideway trading cannot be ruled out. Nevertheless, even in case of another rise, upside is expected to be limited by 61.8% retracement of 19.50 to 16.78 at 18.46 and bring fall resumption. Break of 16.78 will target 16.12 support next.
In the bigger picture, rise from 12.435 should have completed at 19.50 on bearish divergence condition in daily MACD, after just missing 19.55/21.55 resistance zone. Break of 16.12 support will confirm this case and should target lower trend line support at 13.88 level. This will also be the another signal that whole medium term rise from 8.4 has finished too. Sustained break of the lower trend line support will confirm this medium term bearish case and bring further fall towards 8.4 low.
Also, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall.
CRUDE:
DAILY PIVOT POINTS:Crude Oil R3)80.87 R2)80.13 R1)79.50 PP)78.76 S1)78.13 S2)77.39 S3)76.76 H)79.39 L)78.02 C)78.87 DATED12/29
WEEKLY PIVOT POINTS:Crude Oil R3)85.49 R2)81.87 R1)79.96 PP)76.34 S1)74.43 S2)70.81 S3)68.90 H)78.25 L)72.72 C)78.05 DATED12/25
Upside momentum in crude oil remains unconvincing with 4 hours MACD staying below signal line. Bias remains neutral for the moment and some more sideway consolidation could be seen. But still, downside should be contained by 76.19 support and bring another towards 82.0 resistance. However, a break of 76.19 will argue that rebound from 68.59 has completed and deeper fall should then be seen to 71.21 support first.
In the bigger picture, the strong rebound from put crude oil back above 55 days EMA and dampens the bearish view that it has topped out at 33.2. We'll stay neutral for the moment with focus on 82.0 resistance. Break there will indicate that whole medium term rise from 33.2 is still in progress. Nevertheless, focus will remain on reversal signal as we'd expect such rise to conclude inside 76.77/90.24 fibo resistance zone.
Formula
Res3 = H + 2*(P-L)
Res2 = P + (Res1-Sup1)
Res1 = 2 * P - L
Pivot Point = ( H + C + L ) / 3
Sup1 = 2 * P - H
Sup2 = P - (Res1-Sup1)
Sup3 = L - 2*(H-P)
