Commodity Research Report 08 May 2017 Ways2Capital .pdf
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BULLION METALS OUTLOOK GOLD -Gold pared gains after data showed U.S. job growth rebounded in April and stayed on track for its biggest weekly
loss in six months as expectations for a U.S. interest rate hike in June grew and euro zone political risk receded. Pressure
also seen gold prices after the Fed played down any threats to this year's planned rate increases, supporting forecasts of
another move in June. investors' bullishness toward the euro ahead of the second round of France's presidential
election.Which drove gold lower last month, have faded considerably. Gold demand in Asia rose helped by a correction in
prices. Gold prices slumped on Thursday falling to the lowest level in six week to close at $ 1227.2. Prices were down as
Federal Reserve left interest rates unchanged as expected but two more hike expected this year. Prices lost over $ 40 in the
last four days. Prices trading little higher on Friday as prices crashed this week. Gold prices expected to continue its recent
fall till its psychological support at $ 1200 levels. Gold in MCX Futures down around 1.4% on Thursday hit a low of
Rs.28020. Prices likely to find it’s near term support at Rs.28000 to Rs.28100 and could trade in a consolidation phase
around lower levels. Gold prices in India have been at a premium over the last couple of weeks due to stronger demand for
the annual Hindu and Jain holy festival of Akshaya Tritiya and the recent dip in global rates have further boosted the
appetite. Technically Gold market is under fresh selling as market has witnessed gain in open interest by 2.05% to settled at
Chart Details -The Cautious note on precious metal on the back of Global cues, Although gold is showing some resilience
by holding strong support at its Lower Band of the Bollinger Band, its downside potential could be tested next week as the
market faces major hurdles, including cautious a Federal Reserve monetary policy meeting in june the employment numbers
shown better since 2007. The gGld market is preparing to close in negative territory for the first time from last month. Now
MCX Gold is getting support at 28002 and below same could see a test of 27931 level, And resistance is now likely to be
seen at 28197, a move above could see prices testing 28321.
Monday, 08 .May .2017
SILVER - Silver prices settled flat as expectations for a June rate hike surged, after the U.S. economy created more jobs
than expected in April, while unemployment fell to its lowest level since May 2007. The dollar hit its lowest level in
roughly six months against the euro despite the sharp rebound in U.S. payrolls data, which did not shake investors'
bullishness toward the euro ahead of the second round of France's presidential election. Investor sentiment shifted towards
risker assets, after the Labor Department said that the U.S. economy added 211,000 jobs, which confounded expectations
for an increase of 185,000, dropping to 4.4%, down from 4.5% in March. The bullish jobs report sparked investors’
expectations for a June rate hike. Labor-market data are significant for bullion traders because it is one of the economic
reports closely followed by the Fed as the central bank determines the pace of its monetary-policy-normalization initiative.
Silver prices shed to its lowest level since March, down nearly 12% during last three weeks. Prices could close little higher
on Friday above $ 16.5 and expected to trade around $ 16.5 to $ 17 before making its downtrend till $ 15.5. Silver in MCX
Futures expected to close in next week above Rs. 38500 levels. Prices expected to face its important support near Rs.37800
to Rs.38100. A fresh break below Rs.38100 could take prices much deeper till Rs.37500 to Rs.37000 in coming weeks.
Technically silver market is under fresh selling as market has witnessed gain in open interest by 2.02% to settled at 19404
while prices down 34 rupees.
Detail of Chart -The Silver markets also traded flat on global rally US dollar was higher Silver tried to rally during the
week, but found the $ 17 level to be far too resistive on Comex. We turned around and fell significantly, reaching towards
the $ 16.50 level. We believe that the $ 15 level underneath will be supportive, so longer-term traders will probably step to
the side. Now Silver is getting support at 37751 and below same could see a test of 37485 level, And Resistance is now
likely to be seen at 38413, a move above could see prices testing 38809.
✍ 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 prices retraced gains on Friday after data showing a strong rebound in U.S. jobs growth last month
underlined expectations for a June rate hike by the Federal Reserve. Gold for June delivery settled at $
1,229.01 on the Comex division of the New York Mercantile Exchange, off an earlier high of $ 1,236.00.
The precious metal ended the week down 3.26%, the largest week decline since early November. The
Labor Department reported Friday that the U.S. economy added 211,000 jobs last month, beating
expectations for a gain of 185,000 and the unemployment rate ticked down to 4.4%, a near a 10-year low.
The report also showed that the prior month’s figure of 98,000 was revised down to an even lower
79,000. Average hourly earnings rose 0.3% in April. However, downward revisions to previous months
lowered the year-on-year increase to 2.5%, the smallest gain since August 2016, from 2.6% in March.
The jobs data did little to alter the view that the Federal Reserve will raise interest rates in June. Markets
are pricing in around a 75% chance of a hike at the Fed's June meeting, Expectations of a faster pace of
rate increases tend to weigh on gold, which is denominated in dollars and struggles to compete with yieldbearing assets when borrowing costs rise. Fading euro zone political risks also weighed on safe haven for
the precious metal ahead of Sunday’s second round vote in the French presidential elections.
Gold demand in Asia rose this week, helped by a correction in prices, but traders said some buyers have
held back from purchases while they wait for bullion prices to drop further. Analysts said gold buyers
were expecting prices to dip in the upcoming days, banking on the possibility of the U.S. Federal Reserve
hiking interest rates in June. Higher rates increase the opportunity cost of holding non-yielding bullion.
Futures traders are pricing in a 74 percent chance of a June hike. Gold prices in India have been at a
premium over the last couple of weeks due to stronger demand for the annual Hindu and Jain holy festival
of Akshaya Tritiya and the recent dip in global rates have further boosted the appetite. "The price
correction is attracting retail buyers. Jewellery demand is good for wedding season. At this price level
even investment demand is emerging. In the local market, gold futures MAUc1 were trading around
28,238 rupees per 10 grams on Friday, down more than 2 percent compared to last week. The benchmark
spot gold price XAU= is poised to end the week down about 3 percent, the biggest percentage fall since
the week ending Nov. 11.
Gold prices moved higher on Friday, as the U.S. dollar weakened broadly, although the Federal Reserve’s
hawkish stance this week was expected to limit the precious metal’s gains. On the Comex division of the
New York Mercantile Exchange, gold futures for June delivery were up 0.42% at $ 1,233. The June
contract ended Thursday’s session 1.59% lower at $1,228.60 an ounce. Futures were likely to find support
at $1,225.70, Thursday’s low and resistance at $1,257.80, Wednesday’s high. Gold prices had tumbled
after the Federal Reserve left interest rates unchanged on Wednesday, as expected, and gave a positive
assessment of the U.S. economy, suggesting it was still on track for two more rate hikes this year. The
Fed said it expects the economy to rebound after hitting a soft patch in the first three months of the year,
noting that the labor market looks solid and inflation is running close to its target, setting the stage for a
rate hike next month.
But the precious metal benefited from a drop in the U.S. dollar on Thursday. A weaker U.S. dollar usually
supports gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities
cheaper for holders of other currencies.Market participants were now looking ahead to the U.S. nonfarm
payrolls report due later Friday, for further indications on the strength of the job market. Data on
Thursday painted a mixed picture of the U.S. economy, as initial jobless claims fell more than expected
last week while factory orders eased in March.
Gold pared gains on Friday after data showed U.S. job growth rebounded in April and stayed on track for
its biggest weekly loss in six months as expectations for a U.S. interest rate hike in June grew and euro
zone political risk receded. The dollar .DXY hit its lowest level in roughly six months against the euro
despite the sharp rebound in U.S. payrolls data, which did not shake investors' bullishness toward the euro
ahead of the second round of France's presidential election. Spot gold XAU= was up 0.05 percent at $
1,227.89 an ounce by 2:35 p.m. EDT , but set to end the week down 3.2 percent, its biggest weekly drop
since November. U.S. June gold futures GCv1 settled down 0.14 percent at $ 1,226. "The U.S.
employment was stronger than expected," ABN Amro analyst Georgette Boele said. "This only put gold
prices slightly under pressure, because the U.S. dollar didn't rally." Gold fell to the lowest in nearly seven
weeks at $1,225.20 on Thursday after the Fed played down any threats to this year's planned rate
increases, supporting forecasts of another move in June. The 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. Concerns over a victory by far-right candidate Marine Le Pen in the French
presidential election, which drove gold lower last month, have faded considerably. Sunday's vote is
expected to elect centrist Emmanuel Macron, whom investors favour. Following six weeks of fund
buying, gold was left exposed as geo-risks faded, but the fact that ETPs have seen limited selling appetite
could be an indication that this was mostly speculative sellers reducing longs," said Saxo Bank's head of
commodities research, Ole Hansen. Silver XAG= was up 0.2 percent at $ 16.31 an ounce, on track to
close the week down 5.4 percent. "While declining mine supply has supported silver, the dynamic was not
sufficient to take prices higher on a sustained basis, because commercial and non-commercial demand
have been too weak,"
Gold prices dropped to a six-week low in European morning trade on Thursday, adding to overnight
losses after the Federal Reserve left the door open to raising interest rates in June. Comex gold futures
sank to a session low of $ 1,234.80 a troy ounce, a level not seen since March 21. It was last at $ 1,235.70
by 2:55AM ET , down $ 12.80, or about 1%. Meanwhile, spot gold was at $ 1,234.40. Also on the
Comex, silver futures shed 5.9 cents, or about 0.4% to $ 16.48 a troy ounce, after touching a four-month
low of $ 16.41 a day earlier. The Fed concluded its two-day policy meeting Wednesday afternoon, giving
a positive assessment of the U.S. economy while keeping rates unchanged, as was widely expected. The
U.S. central bank's policymaking committee downplayed weak first-quarter economic growth while
emphasizing the strength of the labor market, suggesting it was still on track for two more rate hikes this
year. Futures traders are pricing in around a 70% chance of a hike at the Fed's June meeting, according to
Investing.com’s Fed Rate Monitor Tool. Odds of a September increase was seen at about 85%. The
precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding
assets such as bullion, while boosting the dollar in which it is priced.
Gold demand in India could be muted in the second half of 2017, as the rollout of a new national sales tax
from July is expected to dent appetite in the world's second-biggest consumer, the World Gold Council
said on Thursday. But sales are likely to be robust during the first six months of the year, the WGC said.
Gold consumption in the first quarter of 2017 rose 15 percent to 123.5 tonnes on pent-up demand from
jewellers as retail consumers ramped up purchases for weddings, the WGC said in a report published on
Thursday. The WGC kept its forecast for India's full-year demand at 650 tonnes to 750 tonnes, lower than
a 10-year average of 845 tonnes, but just above last year's level. In 2016, gold demand fell 22 percent
from a year earlier to 666.1 tonnes, the lowest in seven years. "With the implementation of GST, we are
expecting some kind of disruption in demand in the second half," The Goods and Services Tax that will
be implemented from July 1. The long-awaited GST is hailed as India's biggest tax overhaul since
independence in 1947. The GST will replace a slew of federal and state levies, transforming Asia's third
largest economy into a single market for the first time. But small jewellers, who account for nearly twothirds of the gold industry, could face operational issues in transitioning to the GST, Somasundaram said.
Gold is a mainstay of Indian culture, serving as the primary vehicle for household saving for hundreds of
millions of people. The government of Prime Minister Narendra Modi has tried to curb costly bullion
imports and put restrictions on cash transactions. Indians buy more than two-thirds of gold with cash. To
cut down unofficial trading, under the GST, gold should be taxed substantially lower than the existing
duty of 12 percent, The WGC has estimated that 100-120 tonnes of smuggled gold entered India in 2016.
Smuggling has surged since New Delhi raised the import duty on gold to 10 percent in 2013 to narrow a
gaping current account deficit.
Gold prices struggled near the prior session's three-week lows in European morning trade on Wednesday,
as market players looked ahead to the outcome of the Federal Reserve's policy meeting for further clues
on the timing of the next rate hike. Comex gold futures lost around $ 1.00, or less than 0.1%, to $
1,256.10 a troy ounce by 2:55AM ET. Meanwhile, spot gold was at $ 1,254. The yellow metal fell to its
weakest level since April 10 at $ 1,252.60 on Tuesday as strong earnings and manufacturing data boosted
risk appetite. Also on the Comex, SILVER futures inched up 6.6 cents, or about 0.4% to $ 16.89 a troy
ounce, after touching a more than three-month low of $ 16.80 a day earlier. On MCX the precious metal
were trading around 37500-38250 levels. The Fed is not expected to take action on interest rates at the
conclusion of its two-day policy meeting at 2:00PM ET on Wednesday. The U.S. central bank will release
its Post-meeting statement as investors look for any change in language which could point more clearly to