Commodity Research Report 29 May 2017 Ways2Capital .pdf
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BULLION METALS OUTLOOK GOLD -Gold have been getting Support for week for Bullish rally but we thinks this is more of a short-term
reaction to subsiding geopolitical fears and reiterates his long-term bullish outlook based on a number of
fundamental drivers. In early May, the price of gold was roughly $ 1,250 an ounce. Last week, Spot gold prices
rose 0.9 percent to close at $1266.7/oz, while MCX gold prices rose by same margin to close at Rs. 28888 per
10 gms. The dollar slipped and minutes of the Federal Reserve's last policy meeting suggested the U.S. central
bank was cautious about raising interest rates. Minutes of the Federal Open Market Committee's early May
meeting showed policymakers agreed to not tighten credit until they saw evidence that a recent economic
slowdown was transitory. Federal Funds Futures imply traders see an 83 percent chance of a U.S. rate hike in
June, and a 46 percent chance of two more hikes by the year-end. Gold has been supported by weakening U.S.
economic data and troubles facing U.S. President Donald Trump, all of which have weighed on the greenback.
From a week perspective, we expect gold prices to trade higher towards $ 1280 mark while MCX gold prices
will trade higher towards Rs. 29400 mark. Technically Gold is getting Strong Support around 28750 break
below this could drag the Prices toward 28690-28560, or Sustaining above 28800 precious metal may move
towards 28973-29113 on next week trading session.
Chart Details -On The Above given daily Chart of Gold has Applied the Bollinger Band as well Parabolic SAR
both indicators are trading on Overbought position, Although the trend may be continue till new high of gold. As
of Now the Crucial Resistance level for Gold is Around at 29200 level or 28700 will be Strong Support as per
Technical Analysis. If metal Sustain Above 28800 level the Gold may create the high of 2900-29200 in next
trading session or below 28700 may drag toward 28500 in near Term.
Monday, 29 .May .2017
SILVER -Silver on MCX settled up 0.73% at 40091 as the dollar retreated with investors shying away from
riskier assets following a tumble in oil prices. President Donald Trump reportedly said Friday at his bilateral
meeting with Japanese Prime Minister Shinzo Abe that the “big problem” of North Korea’s ambitions for a
nuclear weapon will be dealt with, telling reporters that “you can bet on that, Pressure seen on prices in the week
after minutes from the Fed appeared to show that the majority of the central bank’s officials remain resolute about
hiking rates at their meeting in June. U.S. orders for long lasting manufactured goods fell less than forecast in
April, although the core reading unexpectedly dipped, giving a mixed symbol for the U.S. economy at the
beginning of the second quarter, according to official data. Technically MCX Silver is getting support at 39859
and below same could see a test of 39627 level, And resistance is now likely to be seen at 40259, a move above
could see prices testing 40427.
Detail of Chart -From the Above Depict Daily Chart of Silver We could Analyze the trend of Precious metal for
upcoming trend session. As the Silver is trading in the Crucial levels for Silver is around at 39620-39820 is Down
Side or its middle bands which will be crucial breakout for any negative trend and 39980 which is Upper Band
will work as Crucial Resistance level for the Precious metal. The Significance levels as per Technical Analysis
39950 is Up side and 38700 is Down side.
✍ 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 demand in Asia tapered off this week as buyers took to the sidelines in India to await a new national tax
policy and as China entered a seasonal slowdown. Spot gold XAU= , trading on Friday at just below $1,270 an
ounce, has gained 4 percent since hitting an eight-week low of $1,213.81 on May 9. Prior to the rise in spot
prices due to the uncertain political situation in the United States, bullion buyers in India had been building
stocks ahead of a national sales tax that takes effect on July 1. week, though, gold demand in India slumped as
jewellers became more cautious."Retail demand is weak ... Jewellers are now waiting for a clear price trend and
the new tax system," said Harshad Ajmera, president of the Indian Association of Hallmarking Centres. The
new goods and services tax will replace a slew of federal and state levies from July 1, but the government has
yet to fix a tax rate for gold under the GST. The government is likely to finalise the tax rate for gold on June 3.
higher tax rates, many jewellers have been buying gold the last few months, and this could mean India's
imports are set to plunge during the usual period of peak demand in the second half of the year. in India were
charging a premium of up to $1 an ounce this week over official domestic prices, unchanged from last week.
The domestic price includes a 10 percent import tax. "From the next week, gold could start trading in discount.
In the last few months, banks have imported much more gold than demand," said a Mumbai-based bank dealer
with a private bank. In China, the world's top consumer of gold, demand for the yellow metal has weakened as
May-June is usually a quiet period for jewellers. But traders said they expect festive buying will boost demand
in August and September. "There is not too much demand with prices hovering between $1,250-$1,260," said
Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. Premiums in China were seen at $7 an
ounce, down from $10 last week, traders said. In Hong Kong, premiums were priced in at 60 cents to $1 an
ounce, unchanged from the week before. Prices in Tokyo were quoted at a discount of 50 cents, also unchanged
from last week. Premiums in Singapore were almost unchanged at $1 as against $1-$1.20 the previous
Gold prices moved higher on Friday, but gains were expected to remain limited as the greenback recovered
from recent losses posted after the release of the minutes of the Federal Reserve’s meeting. On the Comex
division of the New York Mercantile Exchange, gold futures for June delivery were up 0.43% at $ 1,261.83.
The June contract ended Thursday’s session 0.26% higher at $1,256.40 an ounce. Futures were likely to find
support at $1,247.60, the low of May 24 and resistance at $1,263.80, the high of May 23. The greenback
regained some ground thanks to Thursday’s better than expected U.S. initial jobless claims data.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major
currencies, was up 0.09% at 97.24. A stronger U.S. dollar usually weighs on gold, as it weakens the metal's
appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other
The data came a day after the minutes of the Fed’s May meeting showed that the central bank plans to unwind
its balance sheet towards the end of the year, possibly using a system where cap limits are implemented on how
much the Fed would roll off every month without reinvesting. The Fed also signaled that interest rates could be
raised soon, but added that "it would be prudent" to wait for more U.S. economic data. Market participants
were looking ahead to U.S. data on durable goods orders, first-quarter economic growth and consumer
sentiment due later in the day. Elsewhere in metals trading, silver futures for July delivery rose 0.23% to
$17.233 a troy ounce, while copper futures for July delivery were steady at $2.598 a pound.
Gold prices were higher in European trade on Thursday, staying near the strongest level in around three weeks
as the U.S. dollar slipped after the Federal Reserve signaled a cautious approach to future rate hikes and the
reduction of its $4.5 trillion balance sheet. Comex gold futures rose $ 5.00, or around 0.4%, to $ 1,258.07 a troy
ounce by 2:35AM ET. Meanwhile, spot gold was at $ 1,258.24, not far from a three-week peak of $1,263.80
touched on Tuesday. Also on the Comex, silver futures tacked on 12.6 cents, or about 0.7%, to $17.24 a troy
ounce, just shy of a one-month high of $17.30 scaled earlier this week.
Minutes from the Fed's last policy meeting showed policymakers agreed they should hold off on raising interest
rates until it was clear a recent U.S. economic slowdown was temporary, though most said a hike was coming
soon. The minutes also showed that policymakers favored a gradual reduction in its massive balance sheet. Fed
staff proposed that the central bank set a cap on the amount of bonds that would be allowed to run off each
month, initially setting it at a low level and raising it every three months. The somewhat dovish minutes
prompted traders to scale back bets on two more rate increases by the end of the year. Futures traders are
currently pricing in around an 77% chance of a hike at the Fed's June meeting,while odds for a second rate hike
by December were at about 40%. The median Fed policymaker forecast is for two more rate increases by yearend. But a recent run of disappointing U.S. economic data combined with signs of deepening political turmoil
in the White House raised doubts over the Fed's ability to raise rates as much as it would like before the end of
As investors looked ahead to minutes of the Federal Reserve’s latest policy meeting due later in the global day
for further hints on the timing of the next U.S. rate hike. Comex gold futures shed $6.20, or around 0.5%, to $
1,249.21 a troy ounce by 3:25AM ET. Meanwhile, spot gold was at $ 1,249.52. Prices of the yellow metal lost
around $ 6.00 on Tuesday, as the U.S. dollar pulled away from recent six-and-a-half-month lows.
The Fed will release minutes of its most recent policy meeting at 2:00PM ET, as traders seek further insight
into the likelihood of higher interest rates in the months ahead. The U.S. central bank left interest rates
unchanged following its meeting on May 3 and gave a positive assessment of the U.S. economy, suggesting it
was still on track for two more rate hikes this year.But a recent run of disappointing U.S. economic data
combined with signs of deepening political turmoil in the White House saw investors temper expectations for
higher interest rates in the months ahead.
Futures traders are currently pricing in around an 80% chance of a hike at the Fed's June meeting as per analyst
expectation while odds for a second rate hike by December were at about 40%.
India's gold imports could plunge in 2017 during the traditional period of peak demand in the second half of the
year, after jewellers have aggressively restocked inventory ahead of a national sales tax that takes effect on July
1. Lower imports from the world's second-biggest consumer during its high-demand season could drag on
global gold prices XAU= that have gained nearly 10 percent this year as political turmoil in the United States
has raised expectations of a slower pace of interest rate hikes this year. Gold imports typically strengthen in the
second half of a year as the precious metal is considered an auspicious gift at weddings and festivals such as
Diwali and Dussehra.
But the timing of strong purchases looks backwards this year, as the implementation of a Goods and Services
Tax that will replace a slew of federal and state levies has buyers cramming their major activity into the first
half of 2017. This (strong buying) trend will not continue in the coming months," said James Jose, secretary of
the Association of Gold Refineries and Mints, referring to the tripling in the value of gold imports in April. of
GST, some people are stocking up fearing higher tax, but demand has been falling (more recently)," he said.
India's gold imports could hit 450 tonnes in the first half of the year, more than double from the same period in
2016, Imports could then fall to 250 tonnes in the second half, about 40 percent lower than a five-year average
for the period of 403 tonnes. Gold imports in the second half of 2016 were 313.8 tonnes, up 60 percent
compared with the first half of that year. "Aggressive Indian buying is unlikely to be there in the second half
like every year. Global prices need to find support from other sources like exchanged traded funds or have to
correct. Another reason for the first-half buying surge is that cash many jewellers deposited in banks because of
demonetization last year has been routed back through official channels, allowing for the restocking of gold,
Nambiath added. In November, Prime Minister Narendra Modi scrapped 500- and 1,000-rupee banknotes - 86
percent of the value of cash in circulation - as part of a crackdown on corruption, tax evasion and militant
financing. gold could start trading at discounts in India in the next few weeks as jewellers "are carrying far
higher inventory than required. "They have to bring imports down in coming months, "Gold imports in May
could drop to around 50 tonnes, Jose of the refiners' association said, from 85 tonnes in April. Lower gold
imports could help Asia's third-biggest economy in containing a swelling trade deficit that hit its highest level
in 29 months in April. GOLD Imports of unrefined gold will also fall sharply in the second half as new rules
allow only refineries accredited by the Bureau of Indian Standards to import gold from June 1, said Jose of
refiners' association. "It will take at least six months for refiners to secure BIS accreditation. Many small
refiners may fail to get accreditation. India imported 142 tonnes of unrefined gold in 2016, according to data
compiled by the World Gold Council. The data Showed for Indian Gold Import by World Gold Council.
Gold prices held near their strongest level in around three weeks in European trade on Tuesday, as investor
sentiment skewed toward safe-haven assets after a suspected terrorist attack at a concert in Britain's city of
Manchester. Comex gold futures firmed at $ 1,261.43 a troy ounce by 3:10AM ET. Meanwhile, spot gold was
at $ 1,261.60. Prices of the yellow metal rose to an overnight peak of $ 1,263.80, just shy of a three-week high
of $ 1,265.00. Police said an explosion at the end of a concert by U.S. singer Ariana Grande in the English city
of Manchester on Monday killed at least 19 people and injured more than 50. Two U.S. officials said a suicide
bomber was suspected, while Prime Minister Theresa May said the incident was being treated as a terrorist