Commodities look like they driven by the events taking place in Greece Wednesday, and the resulting Euro weakness and USD strength.
Reports that the Greek PM would step down to make way for a unity government, sent some waves through the markets including the commodities markets it seems.
August Gold finished higher by 0.1% to 1526.40 oz, and July Silver dipped 0.4% to close at 35.28 oz.
Both metals pushed North this morning in the wake of worse-than-expected economic data, in a flight to safety. But, later the strength in the USD eventually forced the precious metals lower.
Gold traded back to the flat line and finished just in the Green, and Silver fell into negative territory, where it closed just in the Red.
Total Crude Oil and petroleum products stocks fell for the first time in 4 weeks, by -0.62 mmb to 1062.31 mmb in the week ended June 10.
Crude stockpile jumped -3.41 mmb to 365.56 mmb during the week with stock-build recorded in 3 out of 5 PADDs. Cushing stocks rose for the 3rd week, by -1.14 mmb to 37.76 mmb. Utilization rate slipped -1.1% to 86.1%.
Gasoline inventory rose +0.57 mmb to 215.07 mmb although demand rose +2.26% to 9.37M bpd and imports slipped -3.71% to 1.12 M bpd. Production, however, climbed +0.24% to 9.47 M bpd. Distillate inventory dropped -0.11 mmb to 140.82 mmb although demand contracted -5.21% to 3.60M bpd. Both imports and production dropped, by -19.35% and -2.62% respectively.
WTI Crude Oil price rebounded sharply as Crude inventory declined more than expected.
The Overall Technicals
Comex Gold (GC)
As noted before, the recovery from 1462.5 may have finished with 3 waves up to 1555 already. The fall from 1555 is tentatively treated as the 3rd wave of the consolidation from 1577.4.
Intra-day bias remains on the Southside for a test on 1462.5/1471 1 support Zone first.
On the Upside: in the case of another rise, I expect the Key resistance at 1577.4 to limit the upside and to bring another fall to extend the consolidation.
The Big Picture: a short term top is at least made at 1577.4 after Gold hits medium term rising channel resistance. But, here is no indication of long term trend reversal yet. A deeper pull back could come back into 1309.1/1432.5 support Zone. I would anticipate Strong support from medium term channel, now at 1420, to contain downside and finally bring up-trend resumption through 1600, the Psych mark, after the consolidations. But, sustained trading below the 1400 mark will raise the possibility of trend reversal and will turn focus back to 1309.1, the Key support, for confirmation. Stay tuned…
Comex Silver (SI)
The Intra-day bias in Silver is still cautiously on the Southside for a tap at 32.30, Key support. A clear break there will confirm resumption of fall from 49.82 and should target 30, the Psych mark, next.
In case of another recovery, I will still stay Bearish as long as 39.47, the Key resistance, holds. But, a clear break of 39.47 will augur that correction from 49.82 has completed at 32.30, and a stronger rally could be seen to retest the high.
The Big Picture: the steep selloff from 49.82 indicates to me that a medium term Top formed there, ahead of 50, the Psych mark. Silver should now be correcting the whole 5 wave sequence from 14.65; 19.845, 17.735, 31.275, 26.30, 49.82. The correction will likely extend into the 26.30/31.275 support Zone before completion. But, I still anticipate 1 more rising wave before Silver completes the 5 wave up-trend from 8.4 the Y 2008 low, and finally make an important Top. Stay tuned…
Nymex Crude Oil (CL)
The recovery from 96.13 delayed the Bearish case, but I and still anticipating a Southside breakout in here and it may have come Wednesday. And the break 96.13 turns the bias to the Southside and targets 61.8% projection of 114.83 to 94.63 from 102.44 at 89.96, which is close to 90, the Psych mark.
On the Upside: in case of another recovery, the upside should be limited by 102.44, the Key resistance, and bring on resumption of the fall from 114.83.
The Big Picture: as noted before, the medium term rebound from 33.2 is treated as the 2nd leg of consolidation pattern from 147.24. The break of 96.22, the Key support, now serves as the 1st alert of medium term reversal after Crude Oil failed 100% projection of 33.2 to 83.95 from 64.23 at 114.98.
The focus is now on next Cluster Support at 83.85, 61.8% retracement of 64.23 to 114.83 at 83.65, 38.2% retracement of 33.2 to 114.83 at 84.10. And a clear and sustained break there affirms the case of a medium term reversal, and turns my outlook Bearish for 64.23, Key support, and below. But, a, strong rebound above this Cluster Support mark will retain the medium term Bullish outlook and bring on another rise to above 115 level IMO. Stay tuned…
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
