Commodity Research Report 22 May 2017 Ways2Capital .pdf
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BULLION METALS OUTLOOK GOLD -Gold reversed its fortunes somewhat last week, moving higher and ending what has been its worst tranche of losses in a
while. As a result, it may be worth taking a closer look at what was driving this price action and what it could mean moving forward.
In particular, we should take a look at the fundamental and technical factors that have been impacting,and will continue to impact, the
metal this week. For the first time in five weeks, gold prices finished the week higher. One development from this past week that
pulled the yellow metal higher was the Fed interest rate expectations slowing down into the remainder of 2017. This week, we get
some further insight from the Fed as their May 3 meeting minutes are released. Any surprises in the minutes may cause a reaction for
gold if it alters the rate hike path. Later in the week on Friday, we have US GDP and US Durable Goods releases, which could create
some short term volatility as well. Two weeks ago, Fed Fund futures were predicting a 57% chance of two rates hikes prior to the end
of 2017. Last week, that prediction fell to 51% and this week it fell further to 45%. This less aggressive rate hike path is causing the
US Dollar to weaken and for gold prices to strengthen. Ultimately, given the mixed nature of both the technicals and fundamentals,
it’s fairly hard to form a bias moving forward. However, on the balance of things, the evidence seems to suggest that downside risks
may be on the rise due to the increasing chances of a US rate hike and the presence of that technical reversal zone. As a result, we
have a fairly bearish view for the week to come but keep an eye on Trump as he has a propensity to impact the market erratically.
Overall trend of the Gold is bearish for medium-long term .Currently Gold is showing some up move after small correction and trend
is strong and supported with good volume The open interest is not increasing with trend . Caution note buying at higher levels seems
decreasing. The Gold is now trading in oversold level. The oscillator is showing BUY signal For short term Gold is in HOLD LONG
position.Positionally Support for the Gold is 28495 - 28151- 28098 -. Resistance for the Gold is 28762-28813-28940.
Chart Details -On the Above given daily chart of Gold in which we applied Bollinger Band along with Moving Averages From a
technical perspective, the big development has been gold surging above its 100-day EMA and the convergence of the 13 and 34 day’s
averages. Taken together, this would suggest that gold is potentially entering a new uptrend. Interestingly, this would be in agreement
with the Parabolic SAR reading which has been indicating that this has been the case for some time as well Bollinger Band also
indicating Some cautiousness in the market. Moreover, it would tend to indicate that the uptick in buying pressure last week is more
than a knee-jerk reaction. However, contrary to this, we have also seen stochastics trend almost into overbought and the existence of a
historical reversal point near the metal’s current price could limit gains without some strong fundamental support.
Monday, 22 .May .2017
SILVER -Within the past month, silver has gone from being one of the best-performing assets in financial markets to
giving away almost all of its gains this year, but one mining executive remains optimistic on the precious metal during this
volatile period. July Comex silver futures last traded at $ 16.265 an ounce, up only 3% from the low seen in December.
Last month, silver hit a five-month high at $ 18.585 an ounce, a gain of almost 18% from last year’s lows. Overall trend of
the Silver is bearish for medium-long term .Currently Silver is moving sideways The oscillator is on BUY Signal and
Silver is recovering from oversold level .In last 1 month volatality is very less and fresh Buy can be considered in the
Silver if it close above 39591 or buy with strict stop at 37354. The oscillator is on BUY Signal and Silver is recovering
from oversold level For short term Silver is in HOLD position.Positionally Support for the Silver is 3828038228-.Resistance for the Silver is 39585-40656-41282-41336.
Detail of Chart -On the Above given daily Chart of Silver Applied Bollinger Band and Moving Averages Along with
Parabolic SAR, All are Momentum Oscillators. From a technical perspective, Silver prices continue to be stuck in a
consolidation period. We anticipate Silver prices will likely hold above $ 17 for an eventual retest of $ 17.50. One pattern
we are following implies continued sideways action between $ 16 and $ 17 for the next couple of weeks before prices
break higher. Perhaps the resistance trend line noted below holds prices down. Even if Silver prices are suppressed, we
anticipate eventual support to emerge above $ 17.50. Silver price managed to breach 16.80 level and hold above it, which
reinforces the expectations of continuing the bullish on the next week trading session and short term basis, and the way is
open to head towards our next main target at 17.43. Therefore, we are waiting for more rise in the upcoming sessions,
supported by the EMA 50, reminding you that it is important to hold above 16.56 to continue the suggested bullish trend.
Expected trading range for today is between 16.60 support and 17.10 resistance. On the MCX Precious metal to hold above
39340 for Any further Up move towards 39480-39560 in near-Term.
✍ 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 were higher on Friday and notched the largest weekly gain since mid-April as political
uncertainty surrounding the Trump administration pressured the dollar lower, boosting demand for the
precious metal.Gold for June delivery closed up 0.18% at $1,255.07 on the Comex division of the New York
Mercantile Exchange. For the week, the precious metal was up 2.06%. The dollar came under renewed
selling pressure on Friday following reports that a senior White House adviser is a person of interest in the
investigation into alleged Russian interference in November’s presidential election. The Justice Department
on Wednesday appointed a former FBI director as special counsel to investigate possible coordination
between the Trump campaign and Russia. Investor sentiment has been hit by fears that the U.S. political
system could become engulfed by crisis, preventing lawmakers from pushing through tax or spending
reforms. A weaker dollar tends to boost prices for gold, which is denominated in the U.S. currency.
Elsewhere in precious metals trading, silver rose 1.24% to $16.87 a troy ounce late Friday, while copper
climbed 2.19% to $2.58 a pound In the week ahead, investors will be looking at Wednesday’s Federal
Reserve meeting minutes for fresh indications on the possible timing of the next U.S. rate hike. Revised data
on U.S. first quarter growth and private sector survey data out of the euro zone will also be in focus.
Gold demand in Asia was mostly subdued this week as buyers stayed on the sidelines due to a rebound in
bullion prices. The international benchmark spot gold XAU= gained nearly 2 percent this week, on track for
its biggest weekly gain since mid-April as political turbulence in the United States triggered safe-haven
demand. Bullion prices have risen about 3 percent since hitting an eight-week low of $ 1,213.81 on May 9.
"When compared with last year, physical demand in Asia has not picked up for the same period in 2017.
There could be some uplift if gold prices drop another $ 20-$ 30 per ounce," a Hong Kong-based precious
metals refiner said. In China, the world's top consumer of gold, demand for the metal fell after improving in
the previous three weeks. Premiums in China fell by about $5 an ounce to $10, traders said. Consumers in
China could return if benchmark prices dip to $ 1,220-$ 1,225. Premiums in Hong Kong were priced at
about 60 cents to $ 1 an ounce, almost unchanged from the week before. In India, the second-largest
consumer of the metal, gold demand this week remained tepid. "Wedding season is coming to an end.
Footfalls in showrooms were going down drastically in last few days.Local market gold futures MAUc1
were trading around 28,600 rupees per 10 grams on Friday, up nearly 2 percent from last week.
Gold prices were a bit lower in European trade on Thursday, but stayed near the highest level in two weeks
as investors kept an eye on fresh political developments in the U.S. amid uncertainty over the future of
President Donald Trump. Comex gold futures shed around $ 3.00, or about 0.3%, to $ 1,255.29 a troy ounce
by 3:00AM ET. Meanwhile, spot gold was at $ 1,255.51. Prices of the yellow metal jumped to an overnight
peak of $ 1,263.20, the most since May 1. Gold notched a sixth-straight winning session on Wednesday as
investors fretted over the latest news coming out of Washington. U.S. Justice Department Deputy Attorney
General Rod Rosenstein appointed former FBI director Robert Mueller as special counsel to take over the
investigation of Russia's alleged interference in the U.S. presidential election on Wednesday. That followed a
report on Tuesday that said President Trump asked then-FBI Director James Comey to shut down an
investigation into the actions of former National Security Advisor Mike Flynn.The US Dollar index , Which
measures the greenback ‘s strength against a trade- weighted basket of six major currencies, was at 97.61 in
London morning trade.
Gold prices inched higher in European trade on Tuesday, trying for its fifth-straight winning session as signs
of slowing economic activity in the U.S. saw investors temper expectations for more rate hikes by the
Federal Reserve.Comex gold futures rose around $ 5.00, or about 0.4%, to $ 1,235.10 a troy ounce by
2:50AM ET . Meanwhile, spot gold was at $ 1,235.30. The yellow metal notched a fourth-straight winning
session on Monday after rising to its highest since May 4 at $ 1,237.40, following the release of
underwhelming U.S. manufacturing data. The New York Federal Reserve’s index of manufacturing
conditions contracted for the first time in seven months in May, as new orders and shipments turned
The NY Fed said on Monday that its general business conditions index fell to -1.0 this month from a reading
of 5.2 in April. Analysts had expected the index to inch up to 7.0 in May.
On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.
Later on Tuesday, the precious metal could take cues from U.S. data on housing starts and building permits,
as well as industrial production figures, as investors look for further indications on the health of the world’s
largest economy.Markets are pricing in around a 74% chance of a hike at the Fed's June meeting. The
precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding
assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift
series of increases. The dollar index, which tracks the greenback against a basket of six major currencies,
slipped to a more than one-week low of 98.53 in London morning trade.
Meanwhile, investors were also mulling the potential economic policy impact of a Washington Post report
that U.S. President Donald Trump divulged highly classified information during his meeting with Russian
officials last week. Market participants were also keeping a wary eye on developments in North Korea,
which successfully conducted a newly developed mid-to-long range missile test on Sunday aimed at
verifying the capability to carry a "large scale heavy nuclear warhead."
The United Nations Security Council is due to meet on Tuesday to discuss North Korea's latest missile
launch, which was requested by the U.S. and allies South Korea and Japan. Also on the Comex, silver
futures gained 12.5 cents, or about 0.8%, to $16.72 a troy ounce. Gold rose as U.S. political turmoil, a
missile test by North Korea and a worldwide cyber attack fueled demand for safe-haven assets, while weaker
than expected U.S. data pushed the dollar lower, making gold cheaper for holders of other currencies. gold
XAU= was up 0.2 percent at $ 1,230.15 an ounce by 2:11 p.m. EDT, on track for a third day of gains after
hitting an eight-week low of $ 1,213.81 last week. U.S. gold futures GCcv1 settled up 0.2 percent at $ 1,230.
"Continued unpredictability of the Trump administration, North Korea flexing its muscles again and weaker
data coming from the U.S. has helped bring back some interest. than expected U.S. data has reduced
expectations of aggressive interest rate increases by the U.S. Federal Reserve this year, though traders still
expect a rise in June. Higher interest rates tend to boost the dollar . DXY and push bond yields up, putting
pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. Gold prices pared
gains as the U.S. dollar came off its lows and U.S. 10-year Treasury yields bounced up from a 1-1/2-week
low. "Unless there is more stronger data, more than two rate hikes are not very likely in 2017. Money
managers' net longs in COMEX gold fell to the lowest in six-weeks in the week ending May 9. $ 34/oz
decline in gold prices during the week ended 9 May was accompanied by the second-largest weekly decline
in gross long positions. Gold demand, meanwhile, has strengthened in China and India, supporting prices.
other precious metals, silver XAG= was up 1.1 percent at $ 16.63 an ounce, after money managers cut their
net long stance in silver to the smallest since February 2016 from a record high last month.
AHEAD OF THE COMING WEEK SIGNIFICANT EVENTS LIKELY TO AFFECT THE
Monday, May 22
Eurogroup finance ministers are to hold regularly scheduled talks in Brussels.
Financial markets in Canada are to remain closed for a holiday.
Tuesday, May 23
The euro zone is to publish survey data on private sector business activity.
The Ifo Institute is to report on German business climate.
Bank of England Governor Mark Carney and several other officials are to
testify on inflation and the economic outlook before Parliament's Treasury Committee.
Canada is to release data on wholesale sales.
The U.S. is to publish a report on new home sales.
Wednesday, May 24
ECB President Mario Draghi is to speak at an event in Madrid.
The Bank of Canada is to announce its benchmark interest rate and publish a policy statement which outlines
economic conditions and the factors affecting the monetary policy decision.
The U.S. is to report on existing home sales.
The Fed is to publish the minutes of its latest policy meeting, giving investors insight into how officials view