Commodity Research Report 05 June 2017 Ways2Capital .pdf
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BULLION METALS OUTLOOK GOLD -Gold on MCX settled down -0.52% at 28943 pauses it's run and slipped away trimming its recent gains as the dollar
regained some ground ahead of a string of US data due later in the day and on Friday amid mounting hopes for a June rate hike
by the Federal Reserve. Despite the recent run on resistance, day traders continue to buy on the dips. This suggests gold is likely
to find strong support between 28500 and 28600 range but with the significant volatility ahead of key data’s from US. Market
participants are cautious ahead of the FOMC meeting this month as positive payroll data from the United States could mean the
Fed will raise rates as expected at its June 13-14 meeting. Traders believe there is an 87 percent chance of a rate rise. While
Hedge funds are jumping back into gold. Money managers boosted their long positions in US futures by the most in almost a
decade in the week ended May 23, CFTC data show. Traders tracking Gold Silver ratio found ON Friday, Gold’s premium over
silver rose to 73.24 but traders taken opportunity to sell gold silver ratio. The Federal Reserve will hike rates at its June policy
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. Technically Gold market is getting Support at 28864 and below same could see a test of 28785-28612-28532
level, And Resistance is now likely to be seen at 29028-29271-29486, a move above could see prices testing 29713.
Chart Details -On the Above Given daily Chart of Gold has Applied Bollinger Band Along with Parabolic SAR both are now
on the Up move or Showing Some bullishness in it. The gold markets initially fell during the week but found enough support near
the $ 1260 in COMEX or 28420in MCX level to turn around and form a hammer. The hammer is a bullish sign, and a break
above the $ 1275 level shows real strength. There is a gap just above, but I think it’s only a matter of time before the gold markets
continue to go higher. The $ 1300 level beyond that is the next major barrier, and of move above there is even more bullish. WE
have no interest in shorting this market, as we continue to see plenty of buying opportunities on dips. The market continues to
have a lot of volatility built in, due to the uncertainty when it comes to various economic indicators. However, there are also other
concerns such as the geopolitical headlines out there that can move the markets just as much. The Significance levels for Precious
Metal is 28655-28480 is Down side, and 28996-29136-29246 is Up side.
Monday, 05. June .2017
SILVER -Silver on MCX settled down -0.71% at 39813 experienced significant volatility in Friday session pressured by a
rebound in the dollar, after a surge in number of private sector jobs the US economy created last month, set an upbeat tone and
Friday's better monthly jobs report. Also rising expectations of a June rate hike pushed the dollar and U.S. treasury yields to
session highs, which weighed on the precious metal. Silver prices continued to trade above $ 17 mark steadily near the highs of its
range and though it did not follow the gold prices in moving higher, it continues to look pretty strong and seems set to move
higher on the first signs of any trouble for the dollar.While Friday data point shown the US employment report in May,
announced by the private sector employment service company ADP in May, the number of private workers in Non-Agricultural
sector increased by 2,53,000 from the previous month, the market forecast 1,85,000 It exceeded the person.The dollar's
appreciation against the euro. Feeling of high price on goods such as bullion traded in dollar denominated, bullion was sold. In
addition, some observations that the rate hikes by the Fed's Federal Reserve Board will be accelerated in response to good
employment data also became a pressing material for bullion that does not generate interest rates. Technically Silver market is
getting support at 39909 and below same could see a test of 39405-39216level, And Resistance is now likely to be seen at 40441,
a move above could see prices testing 40496-40962.
Detail of Chart -On the Above Given daily Chart of Silver has Applied Bollinger Band Along with Parabolic SAR both are
now on the Up move or Showing Some bullishness in it. The initially Signal for Silver was on Bull side and may the trend will be
continue for further Up side movement till 40749-40895, On the Other Side.Technical Strong Support for Silver is around 4003939947 and Strong Resistance is 406636-40958.
✍ 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 rose to their highest level in over than a month on Friday after a disappointing U.S. employment
report underlined the case for the Federal Reserve to continue raising rates at a gradual pace. Gold for June
delivery settled at $1,278.77 on the Comex division of the New York Mercantile Exchange, up 0.93%. It was
the highest close since April 25. The U.S. economy added 138,000 jobs last month the Labor Department
reported, falling far short of economists’ expectations for 185,000 new jobs. Figures for March and April
were also revised to show that 66,000 fewer jobs were created than expected, indicating that the labor
market may be losing momentum. The unemployment rate ticked down to a 16-year low of 4.3%. The U.S.
dollar index, which measures the greenback’s strength against a trade-weighted basket of six major
currencies, fell 0.57% to 96.61 late Friday. It was the lowest close since the U.S. presidential election on
November 8, which sent the index soaring. Gold and the dollar typically move in opposite directions, which
means if the dollar goes down, gold futures, which are denominated in the U.S. currency, will rise. Most
analysts still believe the disappointing data will not stop the Federal Reserve from raising interest rates at its
meeting later this month. Traders now see a roughly 88% chance§ of a Fed rate increase on June 14, down
slightly from 89% before the jobs report. But the slowdown in jobs growth could temper expectations for a
pick-up in economic growth in the second quarter after the economy expanded by just 1.2% year-over-year
in the first quarter. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding nonyielding assets such as bullion, while boosting the dollar, in which it is priced. Elsewhere in precious metals
trading, silver jumped 1.56% to $17.55 a troy ounce late Friday. India will tax gold at a rate of 3 percent
under a new nationwide sales tax that comes into effect on July 1, the government said on Saturday. The
Goods and Services Tax on gold, which was lower than industry expectations of around 5 percent, will
replace a number of federal and state levies. "In the case of gold, keeping various factors in mind, because
there was an extensive debate ... we finally reached a consensus of taxing gold at 3 percent," Finance
Minister Arun Jaitley told reporters in New Delhi after a meeting of the GST Council. The council
comprising federal and state government representatives is preparing the landmark tax measure. Gold
jewellery, silver and processed diamonds will also be taxed at 3 percent, while the tax on rough diamonds
will be 0.25 percent, revenue secretary Hasmukh Adhia said. The gems and jewellery industry in the world's
second-biggest gold consumer welcomed the tax rate, saying it will help the sector become more compliant
and mature. Currently, the industry pays taxes around 2 to 2.5 percent, so 3 percent is almost as good as no
impact. "With this taxation, many unorganised players will be encouraged to enter organised trade."
Anticipating a higher tax rate, Indian jewellers have been restocking inventory, a move that was expected to
hit imports of the metal in the second half of the year when gold demand is higher due to festive season
buying. Minister Narendra Modi's government is pinning hopes on the GST to boost economic growth that
slumped to 6.1 percent in the quarter to March. India head of the World Gold Council said the government's
decision on gold was an encouraging step and would help stabilise an industry in which millions are
employed. But with customs duty of 10 percent, the total tax on gold is still high and will continue to have
an impact on the jewellery industry, Somasundaram PR, Managing Director, India, World Gold Council, said
in a statement. "This may be an opportune time for the government to cut the import duty and bring down
the total tax on gold significantly so unauthorised imports are totally eliminated and the industry embraces
transparency in letter and spirit under GST," he said. The tax on cotton will be 5 percent, ready-made
garments 12 percent and hand-rolled Indian cigarettes or bidi’s 28 percent, Jaitley said Apparel costing less
than 1,000 rupees ($15.53) and footwear below 500 rupees will attract a tax of 5 percent.
Gold prices edged lower in early morning North American trade on Friday as increased risk appetite
weighed on the safe haven asset and investors looked ahead to the U.S. employment report and its
corresponding impact on Federal Reserve monetary policy. On the Comex division of the New York
Mercantile Exchange, gold for June delivery lost $ 4.40, or around 0.35% to $ 1.262.60 a troy ounce by
7:31AM ET. As global stocks hit record highs on Friday, demand for the safe haven precious metal
diminished. Investors were also cautious ahead of the U.S. jobs data that was expected to confirm that the
Fed would proceed with a 25 basis point hike in interest rates at the June 14 meeting. The U.S. Labor
Department will release its monthly nonfarm payrolls report at 8:30AM ET on Friday and experts widely
believe that the results will set a rate hike by the Federal Reserve at the meeting on June 14 in stone. The
consensus forecast is that the data will show jobs growth of 185,000§ in May, following an increase of
211,000 in the previous month, while the unemployment rate is forecast to hold steady at 4.4%§, its lowest
level since 2007. Average hourly earnings are expected to rise 0.2%§ from April after gaining 0.3% a month
earlier, while the annualized rate is estimated to rise to 2.6%, from the prior 2.5%. Most experts believe that
only a truly “catastrophic” report would stop the Fed from raising rates in two weeks’ time, while markets
put the odds at around 87%. Higher interest rates tend to be dollar-supportive, cutting demand for dollarpriced gold for investors using other currencies. Higher rates also weigh on demand for gold, which doesn’t
bear interest, in favor of yield-bearing investments.
The greenback inched higher Friday, showing caution ahead of the employment report. The U.S. dollar
index, which measures the greenback’s strength against a trade-weighted basket of six major currencies,
edged forward 0.08% at 97.24 by 7:31AM ET.
Gold was sold at a discount to official prices in India for the first time in one-and-a-half months this week
ahead of a new national sales tax regime that takes effect on July 1, while higher prices kept buyers on the
sidelines elsewhere in Asia. Spot gold XAU= hit a five-week high of $1,273.74 earlier this week, boosted by
demand for safe-haven assets due to political tensions in the United States and Europe. "The ongoing
Ramadan festival could spur some buying, but demand is likely to remain slow afterwards," said a
Singapore-based bank dealer. Demand remained tepid in India, the world's second largest consumer, with
dealers offering a discount of up to $1 an ounce to official domestic prices. Last week, they charged a
premium of $1 an ounce. The domestic price includes a 10 percent import tax. "Jewellers have trimmed
purchases despite offering discounts. They have ample inventories, but retail demand is faltering,"India is
going to introduce the new goods and services tax from July 1 that will replace a slew of federal and state
levies, but the government is yet to fix a tax rate for gold under it. The tax slab for gold is likely to be
decided on June 3. a higher tax rate, many jewellers advanced buying in the last few months and it could
mean the country's gold imports could plunge during the traditional period of peak demand in the second
half of the year. jewellers advanced purchases expecting a higher GST rate. Now, they don't need to buy,"
said a Mumbai-based dealer with a private bank.
In top consumer China, a festive holiday in the beginning of the week limited the possibility of any new
purchases, said a Hong Kong-based precious metals refiner. China, Hong Kong and Taiwan markets were
closed for holidays on Monday and Tuesday for the annual Dragon Boat festival.
Premiums were seen at $7 an ounce in China and 60 cents to $1 an ounce in Hong Kong, both unchanged
from the previous week, traders said. Prices in Tokyo were quoted at a discount of 25 cents to 50 cents,
compared with a discount of 50 cents last week. However, platinum sales rose on buying for investment,
said a Tokyo-based trader. Meanwhile, premiums in Singapore were in a range of 60 cents to $1, compared
with $1 in the previous week.
Gold prices eased on Thursday as the dollar rallied after a report showed that the U.S. economy created more
private-sector jobs than expected in May, further strengthening expectations for an interest rate hike this
month. U.S. private employers added 253,000 jobs in May, above economists' expectations, a report by a
payrolls processor showed on Thursday. ADP figures come ahead of the U.S. Labor Department's more
comprehensive non-farm payrolls report on Friday, which includes both public- and private-sector
Also weighing on gold was the firmer dollar index .DXY , which extended gains after the ADP data, already
supported by higher U.S. Treasury yields and solidifying expectations of a rise in U.S. interest rates this
month. "Given that a June rate hike is a mortal lock, it seems unlikely that tomorrow's employment report
will have a major impact on metals. The headline number is a volatile series and more attention will be paid
on earnings as an indicator of future inflation, which could impact the chances of another hike later in the
year." Spot gold XAU= was down 0.04 percent at $1,267.58 per ounce by 3:05 p.m. EDT, having peaked the
previous day at its strongest since April 25 at $ 1,273.74.
U.S. gold futures GCcv1 fell 0.4 percent to settle at $1,270.1. Positive payroll data from the United States
could mean the Fed will raise rates as expected at its June 13-14 meeting. Traders believe there is a 96
percent chance of a rate rise at the June policy meeting and a 50 percent chance of one more hike before the
end of 2017. for American Eagle gold coins remains lacklustre, data from the U.S. Mint showed, with sales
for the first five months of the year tumbling 56 percent from the same period last year to 186,500 ounces.
into gold have also eased.