Commodity Research Report 03 July 2017 Ways2Capital .pdf
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BULLION METALS OUTLOOK GOLD -Gold on MCX settled up 0.14% at 28608 recovered from the day's low while Comex Gold prices were slightly lower down
by $3.30 to settle at $1,245.80/oz extending this week's run of directionless trading amid mixed signals on US. An important feature in
the marketplace this week has been rising world government bond yields.Earlier this week central bank officials, many of whom were
speaking at a conference in Portugal, sounded a more hawkish tone on their monetary policies. It appears the central bankers of the
world are now embracing the US Federal Reserve’s notion that the time has come to start raising interest rates and winding down the
extraordinary quantitative easing programs that have been in place for nearly 10 years. The “easy money” from the central bankers the
past several years has been a bullish underlying factor for the precious metals markets. With the QE programs from the central banks
now ready to wind down further, it’s a bearish element for the metals. Yesterday’s encouraging economic news prompted speculation
the Federal Reserve will again raise interest rates in the coming months, but remarks from a top central banker made the case for
keeping rates on hold.While US gross domestic product expanded at a 1.4% annual pace in the first quarter, revised figures show.
That’s an improvement from the prior 1.2% reading and doubles the initial 0.7% estimate. Still, St. Louis Fed President James Bullard
said the current level of interest rates is appropriate for the low-inflation environment. Technically Gold market is getting support at
28483 and below same could see a test of 28358 levels, and resistance is now likely to be seen at 28681, a move above could see prices
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. Gold prices were down this week with the precious metal off by 0.98% to trade at
1243 ahead of the New York close on Friday. The losses come alongside weakness in broader equity markets with all three major
US indices flat / lower on the week. However, with concerns over a broader shift in the tone of global central bankers and growing
doubts regarding the future of fiscal policy, gold is caught between a rock and hard place with the technical outlook also
highlighting a near-term consolidation range. . Technically Gold market is getting support at 28483 and below same could see a test
of 28358 levels, and resistance is now likely to be seen at 28681, a move above could see prices testing 28754.
Monday, 03. July .2017
SILVER -Silver on MCX settled down -0.27% at 38599 as a flurry of comments from central banks bosses hinting at tapering
ultra-loose monetary policy measures weighed on prices. The U.S. economy slowed less than feared in the first quarter due
largely to a jump in consumer spending, providing a slightly more encouraging outlook for growth this year. The dollar extended
its losses on Friday as major central banks signalled that the era of cheap money was coming to an end in a boon to sterling, the
euro and Canadian dollar, while shares were hit by dismal performances of European and U.S. markets. The world's top central
bankers have delivered what seems to be a collective message this week that quantitative easing is being put back in its box and
interest rates are going up - and global markets are taking note.British Prime Minister Theresa May won backing for her policy
programme with a slender parliamentary majority on Thursday in the first test of her authority after an election setback and
growing pressure on her Brexit and austerity agenda. Global bond yields have ticked higher during the week, after The European
Central Bank, Bank of England, and Bank of Canada signaled that measures to tighten monetary policy could be adopted
relatively soon Comments concerning tighter monetary policy measures were expected from the Bank of Canada and the
European Central Bank but it was the change in tone from Bank of England governor Mark Carney that caught investors off
guard. Bank of England governor Mark Carney, appeared to reverse his recent assertion that there “was no need to raise rates
soon”, after he said on Wednesday that “some removal of monetary stimulus is likely to become necessary. Technically silver
market is under long liquidation as market has witnessed drop in open interest by -20.41% to settled at 8515 while prices down
105 rupees. Now Silver is getting support at 38334 and below same could see a test of 38068 levels, and resistance is now likely
to be seen at 38893, a move above could see prices testing 39186.
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. there was a supposed “fat finger” order in silver which sent it sharply
lower in the span of a minute. Whether it was a fat finger, algo, or some other reason, the precious metal traded almost to the tick
to the 200-day MA before bouncing. It has support by way of the 200-day and a trend-line back to January. Looking for a little
more upside, but the 1260s will likely present problematic. Silver shot down into two trend-lines extending higher from December
of 2015 and 2016. The spike lower and reversal skews risk higher for now. Technically silver market is under long liquidation as
market has witnessed drop in open interest by -20.41% to settled at 8515 while prices down 105 rupees. Now Silver is getting
support at 38334 and below same could see a test of 38068 levels, and resistance is now likely to be seen at 38893, a move above
could see prices testing 39186.
✍ 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 lower at the close on Friday and posted their first weekly decline since March as a rise in
global bond yields curbed investor demand for the precious metal. Gold for August delivery closed down
0.27% at $1,242.48 on the Comex division of the New York Mercantile Exchange, bringing the week’s losses
to 1.27%. The precious metal still ended the first half of the year with a gain of 8%, boosted by a decline in
the dollar to its lows of the year. Gold prices came under pressure amid indications that several major central
banks around the world are getting ready to join the Federal Reserve in tightening monetary policy. Investor
expectations mounted for tighter monetary policy across the globe after the heads of the European Central
Bank, the Bank of England and the Bank of Canada adopted a more hawkish view on monetary policy.
Hawkish signals from foreign central banks contrasted with doubts over whether the Federal Reserve will be
able to hike rates again this year given a recent batch of weak U.S. economic data and growing skepticism
that the Trump administration will be able to deliver on its pro-growth agenda. Benchmark U.S. Treasury
yields and German 10-year government bond yields hit five-week highs and the euro hit 14-month peaks as
investors assessed the likelihood that the ECB could soon start to unwind its quantitative easing program.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as
bullion, but weakness in the dollar in which it is priced, has been offsetting the impact of higher yields.
Higher yields tend to increase the opportunity cost of purchasing commodities that don’t bear a yield.
Elsewhere in precious metals trading, silver was little changed at $16.58 a troy ounce late Friday.
Meanwhile, copper futures rose to a four-month high, rising 0.46% to $2.708 a pound, to end the month with
gains of 5.33%.
Gold prices edged lower on Friday, still weighed by the previous session’s upbeat U.S. economic growth
data, although hawkish comments by several central banks limited the greenback’s gains.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery eased 0.08%
to $1,244.91. The August contract ended Thursday’s session 0.26% lower at $1,245.80 an ounce. Futures
were likely to find support at $1,236.50, the of low June 26 and resistance at $1,255.70, the high from June
28. Official data on Thursday showed that U.S. gross domestic product rose 1.4% in the first quarter, revised
up from the previous reading of a 1.2% expansion. Analysts had expected growth to remain unchanged from
the prior revision. The upbeat data added to expectations for additional U.S. rate hikes this year. The Federal
Reserve hiked interest rates earlier this month and left the door open for further increases later in the year,
though a batch of mixed economic data recently has had investors wondering whether the Fed would be able
to stay on its planned tightening path.The precious metal is sensitive to moves in U.S. rates, which lift the
opportunity cost of holding non-yielding assets such as bullion. However, the U.S. dollar’s gains were
limited after European Central Bank President Mario Draghi indicated on Tuesday that the bank could soon
start to unwind its quantitative easing program.
Gold prices fell on Thursday as signs that central banks may scale back their ultra-loose monetary policy
pushed bond yields higher on both sides of the Atlantic, though a decline in the dollar to its lows for the year
lent support. Gold is highly sensitive to rising interest rates, which increase the opportunity cost of holding
non-yielding bullion. However, losses in the dollar .DXY , in which it is priced, have been offsetting the
impact of higher yields to keep gold rangebound. Spot gold XAU= was down 0.3 percent at $1,245.34 an
ounce by 2:25 p.m. EDT (1825 GMT), while U.S. gold futures GCcv1 for August delivery settled down 0.3
percent at $1,245.80. "It is a battle between U.S. dollar weakness and expectations of central banks removing
monetary stimulus. U.S. dollar weakness is supportive but the latter not," ABN Amro analyst Georgette
Boele said. A raft of hawkish comments from central banks this week signaled the era of easy money, which
helped gold hit record highs at $1,920.30 an ounce in 2011, might be coming to an end in more places than
just the United States. Benchmark U.S. Treasury yields and German 10-year government bond yields hit
five-week highs and the euro touched a 14-month peak as investors geared up for the prospect of the
European Central Bank scaling back monetary stimulus. Traders were also reevaluating the prospects for
U.S. President Donald Trump's policy agenda. part of Trump's travel ban going back into effect, there may be
a partial re-pricing of the rest of Trump's agenda in the market, this time to gold's detriment," RBC Capital
Markets said in a research note.
Gold premiums in India jumped to the highest level in 7-1/2 months this week as consumers advanced
purchases to avoid paying higher tax when a new nationwide sales tax takes effect from July 1. India, the
world's second-biggest gold consumer, has said it will impose a 3 percent goods and services tax (GST) on
gold, up from 1.2 percent currently. GST will replace a slew of federal and state levies from Saturday,
transforming Asia's third-largest economy into a single economic zone with common indirect taxes. gold
demand is usually weak in June, jewellery showrooms in key Indian cities like Mumbai and Kolkata were
crowded this week. "People are advancing buying to avoid paying additional tax," said Kumar Jain, vice
president at Mumbai Jewellers Association. Dealers were charging a premium of up to $10 an ounce this
week over official domestic prices, the highest since mid-November. Last week, the premium stood at only
$1. The domestic price includes a 10 percent import tax. "The supply is limited in the market. Sellers have
raised prices anticipating the GST," said a Mumbai-based dealer with a private bank. India's gold imports
surged fourfold in May from a year ago to 103 tonnes as jewellers increased purchases to replenish inventory
and stock up ahead of the new sales tax, provisional data from consultancy GFMS showed. top gold user
China, demand was slow, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Premiums in China ranged between $9 and $11 an ounce, compared to $8-$10 last week, traders said. In
Hong Kong, premiums were unchanged at 50 cents to $1. Demand from consumers and the industrial sector
was low, said a Tokyo-based trader, adding it may continue for the next few months with spot gold unlikely
to fall below $1,200 an ounce anytime soon.
Gold prices edged higher in European trade on Thursday, as the dollar extended its recent decline to the
lowest level since October, boosting the appeal of the yellow metal. Comex gold futures were at $1,252.69 a
troy ounce by 3:05AM ET , up $3.60, or around 0.3%. Gold ended higher on Wednesday to notch its fifth
gain in six sessions. Also on the Comex, silver futures ticked up 12.0 cents, or roughly 0.7%, to $16.84 a troy
ounce. The dollar wallowed at one-year lows against the euro and slipped against sterling as investors priced
in tighter monetary policy in Europe, following hawkish comments made by key central bank officials.
Sterling added to gains made after Bank of England Governor Mark Carney said on Wednesday that the
central bank is likely to need to raise interest rates as the British economy comes closer to operating at full
capacity. Meanwhile, European Central Bank President Mario Draghi sparked the euro's rally on Tuesday,
when he hinted that the ECB could trim its stimulus this year. The Federal Reserve hiked interest rates earlier
this month and left the door open for further increases later in the year, though a batch of mixed economic
data recently has had investors wondering whether the Fed would be able to stay on its planned tightening
path. The dollar index, which measures the greenback against a basket of six major currencies, was down
0.3% at 95.49 in early trade, its lowest since October 3. The buck came under additional pressure following a
delay of the healthcare bill vote by the U.S. Senate earlier in the week. Market participants are concerned
that the Trump administration will find it hard to follow through with tax cuts and fiscal stimulus steps,
without first getting the healthcare bill passed. On the data front, traders will also keep an eye out on a final
reading of U.S. first-quarter economic growth due later in the global day for further evidence on the health of
the world's biggest economy. The data is expected to show that the economy expanded at a 1.2% annual rate
in the first three months of 2017, unchanged from a preliminary estimate.
Gold prices edged higher in European trade on Wednesday, as the U.S. dollar and global stock markets
pulled back, boosting the appeal of the yellow metal. Comex gold futures were at $1,252.52 a troy ounce by
3:05AM ET (0705GMT), up $5.55, or around 0.5%. Gold edged higher Tuesday to notch its fourth gain in
five sessions. Also on the Comex, silver futures ticked up 17.7 cents, or roughly 1.1%, to $16.76 a troy
ounce. The dollar nursed its losses, having come under pressure overnight after U.S. Senate Majority Leader
Mitch McConnell delayed a vote on healthcare legislation until after the Senate's July 4 recess, hoping to get
more support from Republican senators. Market participants are concerned that the Trump administration
will find it hard to follow through with tax cuts and fiscal stimulus steps, without first getting the healthcare
bill passed. The dollar index, which measures the greenback against a basket of six major currencies, was
96.09 in early trade, after falling to its lowest since November at 95.92 in overnight trade. Meanwhile,
European and Asian stock markets slumped in wake of a downbeat performance on Wall Street overnight,
where shares fell across the board with the benchmark S&P 500posting its biggest one-day drop in about six
Gold prices edged higher in European trade on Tuesday, recovering from the prior session's six-week low as
market players looked ahead to comments from Federal Reserve Chair Janet Yellen for further signs of the
central bank's likely rate hike trajectory through the end of the year. Comex gold futures were at $1,251.60 a