Gold futures on the COMEX Division of the New York Merc extended the rally Wednesday, as Greek approval of austerity measures boost the EUR vs. the USD, which helps support the Gold price.
The most active Gold contract for August delivery rose 10.2, or 0.68%, to 1510.4 oz.
Market analysts said that the Greece’s approval put pressure on the USD while benefiting the commodities in general, and Gold. It added an extra support as many players seek Gold as a physical currency against the paper currency “Greenback.”.
The Greek parliament approved a package of additional austerity measures and asset sales in a bid to avert a potentially devastating default, even as thousands of protesters clashed with police in Athens.
As a result, the Dollar Index, which measures the performance of the Us unit against a basket of 6 currencies, fell to 74.672 from Tuesday’s 75.063.
The Gold price has enjoyed a 2nd session rise after falling below 1,500 Monday.
Silver for September delivery rose 1.117, or 3.3%, to 34.769. Platinum for October delivery gained 33.1, or 2%, to 1726.6 oz.
Crude Oil prices rose Wednesday as US Crude inventories dropped unexpectedly last week.
The US Energy Information Administration said on Wednesday, US Crude inventories fell 4.4M bbls to 359.5M in the week ended June 24, much more than forecast, as Crude Oil imports slowed and refineries increased inputs. This was the 4th straight weekly loss, driving Crude Oil stocks to the lowest level since April. Gasoline stockpiles also declined 1.4M bbls, missing the estimates of a small increase.
Crude Oil players were encouraged by the result that Greek parliament passed the new 5 yr austerity program. Parliament’ s approval made it possible for Greece to receive aid from EU and IMF so as to avoid a debt default. The EUR rallied about 0.5% against the USD The Dollar Index, in contrast, fell 0.5%. The weaker USD lifted Crude Oil.
WTI Light, Sweet Crude for August delivery rose 2.28, or 2.52% to settle at 92.89 bbl on the New York Merc. In London, Brent Light Crude for August delivery gained 3.59, or 3.30% to close at 112.37 bbl.
The Overall Technicals
Comex Gold (GC)
A temporary low was formed at 1490.8 and intra-day bias is Neutral Tuesday. Some more consolidation might be seen. But, the fall from 1559.3 is treated as the 3rd wave of the consolidation pattern from 1577.4. So, the recovery from 1490.8 is expected to be limited to below 1559.3, and bring on another fall. A clear break of 1490.8 targets 1462.5, Key support, and below.
The Big Picture: a short term Top was put in at 1577.4 after Gold hits medium term rising channel resistance mark. But, there is no indication of long term trend reversal. A deeper pull back come back into 1309.1/1432.5 support Zone, but Strong support should be seen there to contain the downside, and finally bring on the up-trend resumption through 1600, the Psych mark, after the consolidations. That said, a clear break and sustained trading below 1400 raises the possibility of trend reversal, and will turn my focus back to 1309.1 support for confirmation. Stay tuned…
Comex Silver (SI)
Silver recovered today but a further decline is expected with 36.77, the minor resistance intact, looking at 32.30 for support. A clear break there confirms the resumption of the fall from 49.82, and should target 30, the Psych mark, next.
On the Upside: a break above 36.77, the minor resistance. will turn bias Neutral, and bring another rise to extend the consolidation pattern from 32.30. But, even in that case, I will stay Bearish as long as 39.47, the Key resistance, holds and expect a Southside breakout soon.
The Big Picture: the steep sell off from 49.82 indicates 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 26.30/31.275 support Zone before completion. That said, I still anticipate 1 more rising wave before Silver completes the 5 wave up-trend from 8.4, the Y 2008 low, and finally makes an important Top. Stay tuned…
Nymex Crude Oil (CL)
Crude Oil recovers further Wednesday and more consolidation could be seen above 89.61 the temporary low. The near term outlook is cautiously Bearish with 95.70, the Key resistance, intact, and a further decline is still favored. Sustained trading below 90, paves the way to the Key cluster support Zone at 83.65/85.
On the Upside: a clear break above 95.70, the minor resistance, will bring on a stronger recovery towards 102.44, the Key resistance instead IMO.
The Big Picture: as I 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 support 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. Focus is now on the next cluster support Zone at 83.85, a 61.8% retracement of 64.23 to 114.83 at 83.65, 38.2% retracement of 33.2 to 114.83 at 84.10. A clear break there confirms the case of medium term reversal, and turn my outlook Bearish for 64.23, the Key support, and below. That said, a Strong rebound above this cluster support Zone will retain my medium term Bullish outlook, and bring another rise to above 115 level before a reversal IMO. Stay tuned…
