Commodity Research Report 06 february 2017 Ways2Capital .pdf
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BULLION METALS OUTLOOK GOLD - The price of gold has traded up and down since the election. Comex gold has been less volatile
than gold mining stocks and the gold stock exchange-traded fund. We are very bullish on gold prices for
2017 although the current scenario of Gold is bearish over the short term, expecting a test of the low in
the next Week or two. Demand for gold in India rose this week as many jewellers resumed purchases
after having stayed away for a few weeks hoping for an import duty cut in the government budget. But
Government did not change the import duty on gold. bullion industry had been urging a reduction in the
duty to combat smuggling, which has increased since India raised import duty to 10 percent in August
2013 in an effort to narrow a gaping current account deficit. The precious Metal is Expected to trade in
positive note in this week the crucial levels for Gold is 29779 is up side and 27612 is Down side.
Chart Details - The Bollinger Bands show price giving support from the middle band a good test and
I expect price to eventually move back up to the upper band and push even higher into that band to set
up the final rally high. We have been expecting the 5 point broadening top to morph into a more bearish
7 point top and I believe we now have the point 6 low in place at $1124. It is possible for one last
marginal low although I personally favour a higher low to form. Let’s see. And in MCX it is Expected
to touch the level of 30291 in next week Trading Session.
Monday, 6 February 2017
SILVER - Silver prices are expected to continue moving higher in the year 2017 backed by a strong
pick up in the physical demand as a result of increasing use in solar power globally. India’s increasing
demand for solar power will further add to the momentum. The Significance levels for Silver is 4298043453 is up side and 41025-40865 is Down side
Detail of Chart - The daily chart of the Silver shows it making a stair-step series of lower highs and
lower lows, following the path of the declining 50-day moving average. The inverse head-and-shoulders
pattern began forming last November, with the low that month forming the left shoulder, the December
low defining the head, and this month’s price action marking the right shoulder. Previous resistance in
the $ 16.30 area delineates the neckline, and it was successfully retested in Friday’s strong session. The
Significance Levels for Silver is 39700-40100 is Down Side and 43980-42651 is Up side silver is
Expected to trade in Bullish trend for next trading Week.
✍ MCX DAILY LEVELS
✍ MCX WEEKLY LEVELS
✍ FOREX DAILY LEVELS
✍ FOREX WEEKLY LEVELS
✍ NCDEX DAILY LEVELS
✍ NCDEX WEEKLY LEVELS
MCX - WEEKLY NEWS LETTERS
✍ INTERNATIONAL UPDATES ( BULLION & ENERGY )
Gold ended slightly higher on Friday, after the latest U.S. jobs report showing weak wage growth last
month dampened expectations for a faster rate of interest rate hikes this year. Gold for April delivery
settled up 0.2% at $ 1,221.85 on the Comex division of the New York Mercantile Exchange. The Labor
Department said the U.S. economy added 227,000 jobs in January from the prior month, while the
unemployment rate ticked up to 4.8% from 4.7% in December, as more Americans joined the workforce.
But average hourly earnings rose 2.5% in January from a year earlier, slowing from 2.8% in December.
The slowdown in wage growth prompted speculation that the Fed will avoid hiking interest rates too
quickly. In its latest monetary policy statement on Wednesday the Fed stuck to its view that the economy
is strengthening, but gave no clear signal on the timing of its next rate hike as officials wait to assess the
possible economic impact of the Trump administration’s protectionist policies and recent remarks about
currencies. The precious metal was 2.14% higher for the week, as the dollar remained under pressure
amid concerns over Donald Trump's presidential style and a lack of clarity on rate hikes. Both a strong
dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and
struggles to compete with yield-bearing assets when borrowing costs rise. Elsewhere in precious metals
trading, silver was at $17.51 a troy ounce late Friday and ended the week with gains of 1.7%. Copper was
trading at $2.61 a pound late Friday and ended the week down 2.86%, and platinum was up 0.73% on the
day at $1,006.85 an ounce. In the coming week, China is to release data on service sector activity and
trade, while a report on German factory orders will be in focus in the euro zone. The U.S. is to release
monthly trade figures in what will be a thin week for economic data.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely
to affect the markets.
Monday, February 6
Australia is to release data on retail sales.
China is to publish its Caixin services PMI.
In the euro zone, Germany is to report on factory orders.
Tuesday, February 7
The Reserve Bank of Australia is to announce its benchmark interest rate and publish a rate statement
which outlines economic conditions and the factors affecting the monetary policy decision.
New Zealand is to release a report on inflation expectations.
The UK is to publish a report on house price inflation.
Canada is to release reports on trade, building permits and business activity.
The U.S. is also to release its latest trade figures.
Wednesday, February 8
The European Commission is to release its latest economic forecasts for the European Union.
Thursday, February 9
The Reserve Bank of New Zealand is to announce its benchmark interest rate and hold a press conference
to discuss the monetary policy decision.
Australia is to release a report on business confidence.
Canada is to report on new house price inflation.
The U.S. is to publish data on initial jobless claims and Chicago Fed President Charles Evans is to speak.
Friday, February 10
The RBA is to publish its monetary policy statement.
China is to release trade figures.
The UK is to produce reports on manufacturing production and trade.
Canada is to publish its monthly employment report.
The U.S. is to round up the week with preliminary figures on consumer sentiment.
Gold was little changed on Friday, erasing earlier losses as the dollar came under pressure from a U.S.
payrolls report that flagged up weak wage growth last month, weakening the case for near-term interest
rate hikes. While U.S. job growth surged more than expected in January as construction firms and retailers
ramped up hiring, wages barely rose. gold XAU= was unchanged at $1,215.75 an ounce by 2:25 p.m. EST
(1925 GMT), off an earlier low of $1,207.10. U.S. gold futures GCv1 for April delivery settled up 0.1
percent at $1,220.80 per ounce. "Markets seem to be looking at the soft wage data, which signal rather
weak inflationary pressure, and therefore less need for the Fed to raise interest rates, report. The U.S.
dollar .DXY and 10-year U.S. Treasury yields US10YT=RR were little changed, having come off session
Gold is on track to rise around 2 percent this week as the dollar headed for a fourth weekly drop on
worries about Donald Trump's presidential style and a lack of clarity on rate hikes. The yellow metal is
highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding
bullion while boosting the dollar, in which it is priced. Holdings of the world's largest gold-backed
exchange-traded fund, SPDR Gold Shares GLD , rose for a second day on Thursday by 1.5 tonnes to
811.22 tonnes. A bounce in investment to a four-year high drove a modest gain in gold demand last year,
data from the World Gold Council showed on Friday, even as use of the metal in jewelry slid to its lowest
since 2009 and coin and bar buying slid. inflows were the sole driver of demand growth in 2016 - we saw
the second highest inflows since 2009. "Technical analysis still look bullish for the white metal, But the
lack of liquidity and concerns that China, due to its pollution problem, may direct the auto sector towards
electric vehicles looms in the shadows." Silver XAG= was down 0.2 percent at $17.40, having reached its
highest in more than 11 weeks at $17.73 in the previous session.
A bounce in investment to a four-year high drove a modest gain in gold demand last year, data from the
World Gold Council showed on Friday, even as use of the metal in jewellery slid to its lowest since 2009
and coin and bar buying dipped. Global demand for physical gold in the form of jewellery, coins and bars
fell 9 percent as higher prices and import curbs hurt demand, particularly in the major Chinese and Indian
markets. Central banks also bought a third less gold. However a surge in investment in gold-backed
exchange-traded funds offset that to lift overall gold demand by 2 percent to 4,309 tonnes, its highest
since 2013. "There are three primary factors that fuelled strong inflows into ETFs -- we had the spread of
negative interest rates, then the steady pushback in expectations surrounding U.S. interest rate (hikes), and
the uncertainty stemming from geopolitical risk. "Investment as a whole posted its best year since 2012,
but elsewhere demand was subdued."
ETF buying saw its strongest quarter on record in the first three months of last year, with 342.3 tonnes
added to funds, chiefly in the United States and Europe. That tailed off later in the year, however, with
outflows of 193.1 tonnes seen in the fourth quarter. Investment in coins and bars fell 2 percent. Britain,
where the pound fell after the June vote to leave the European Union, was a bright spot, with demand
rising 28 percent to 10.9 tonnes. Global jewellery demand, the single biggest demand segment for gold,
fell 15 percent to 2,042 tonnes.
Indian consumer demand fell 21 percent last year to 675.5 tonnes, its lowest since 2009, as prices rose and
import curbs were introduced. The WGC sees it remaining close to this level this year, at 650-750 tonnes.
Demand in number one consumer China is expected to improve to 950-1,000 tonnes, after it fell 7 percent
last year to 913.6 tonnes, its weakest since 2012. Central bank demand was in positive territory for a
seventh straight year, but was at its lowest since 2010 at 383.6 tonnes.
"If you look at gold as a percentage of FX reserves, the twin effects of FX reserves coming down and the
gold price rising has boosted gold as a reserve asset across central banks around the world," Hewitt said.
"That has been another factor that weighs on reserve managers' minds."