Gold futures on the COMEX Division of the New York Merc closed lower Friday, as US consumer price extended losses and the consumer sentiment index slumped, and Silver and platinum both followed suit.
The most active Gold contract for August delivery fell US$20.1, or 1.7%, to finish at US$1,188.2 oz, the lowest settlement price since May 21.
The US Labor Department reported Friday that the consumer prices dropped 0.1% in June, the 3 month running drop following a 0.2% fall in May and a 0.1% drop in April, draging down the annual inflation rate to an 8 month low, bringing on deflation speculation.
The continued decline in consumer prices worsened players fears that the strength in US economic recovery is not yet strong enough, and deflation may pose a threat for the struggling US economy. Therefore, Gold sank because players usually buy Gold as a hedge against inflation,
Sept Silver fell 57.4c, or 3.1%, to settle at US$17.788 oz, October Platinum lost US$21.6, or 1.4%, to settle at US$1,512.1 oz.
The Overall Gold Weekly Technical Outlook
Comex Gold (GC)
Gold’s sharp decline Friday augurs that the recovery from 1185 completed at 1218.8. Initial bias is cautiously on the Southside this week. A break of 1185 will confirm that whole decline from 1266.5 has resumed and should target 61.8% projection of 1266.5 to 1185 from 1218.8 at 1168.4 next, which is close to 1166 Key support.
On the Upside: a break above 1218.8 will turn bias Neutral and bring more consolidations. But, I believe that risk is heavily on the Southside as long as the 1266.5 Key resistance holds.
The Big Picture: Gold’s rally from 1044.5 should have completed at 1266.5, and the whole medium term rise from 681 might have finished with 5 waves up on Bearish divergence condition in daily MACD.
Sustained trading below 55 Day EMA, now at 1205.8, will confirm this case and bring on a deep correction to 1044.5 cluster support, the 38.2% retracement of 681 to 1266.5 at 1042.8 at least.
The Long-term Picture: I now believe that 1266.5 is an important medium term Top in Gold, therefore look for a good correction in here. A breach of the Key 1000 psych level is possible. But, there is no indication of long term up-trend reversal yet. So,, I will keep the long term Bullish POV, and expect whole up trend from 1999 low of 253 to continue to 100% projection of 253 to 1033.9 from 681 at 1462 level after completing the correction from 1266.5. Stay tuned….
Crude Oil prices fell on weak US consumer confidence
Crude Oil traded lower Friday as weaker US consumer confidence hammered the stock markets.
The University of Michigan and Reuters said in a twice-monthly survey that the index of consumer sentiment compiled from the survey fell to 66.5 in early July from 76.
Citigroup Inc. (C) and Bank of America (BAC) worried players by reporting declines in trading revenue. Bank of America, the nation ’s largest lender by assets, disappointed investors with its lukewarm performance across about all business lines.
Light, Sweet Crude Oil for August delivery was down 61c to US$76. 01 bbl on the New York Merc.
In London, Brent Crude Oil fell 16c to US$75.37 bbl on the ICE Futures exchange
The Overall Crude Oil Weekly Technical Outlook
Nymex Crude Oil (CL)
Crude Oil moved higher to 78.15 last week but faded. With 4 hrs MACD staying below signal line, initial bias is Neutral this week. Though another rise cannot be ruled out with 74.23 minor support intact, I will continue to expect Northside to be limited by 79.38 resistance and bring a resumption of the fall.
On the Downside: a break below 74.23 will flip intra-day bias back to the Southside, and a further break of 71.09 will confirm that fall from 79.38 has resumed. Also this will affirm my POV that choppy recovery from 64.23 has completed at 79.38 already and should target the 64.23 next support level.
The Big Picture: a recovery from 64.23 is treated as a correction to fall from 87.15 and has possibly completed at 79.38 already. A break of 71.09 support will indicate that decline from 87.15 is likely resuming. This will also revive the Bearish POV that medium term rise from 33.2 finished at 87.15, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. If that be the case, I expect tosee another fall to 50% retracement of 33.2 to 87.15 at 60.18 at least.
The Long-term Picture: the current development suggests that rebound from 33.2 finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. My POC is that the fall from 87.15 would develop into the 3rd falling leg of the whole correction from 147.27 and so, I still anticipate a eventual break of 33.2 low in the long term as the correction extends. Stay tuned…
