Commodity Research Report 07 August 2017 Ways2Capital .pdf
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BULLION METALS OUTLOOK GOLD - Gold on MCX settled down 0.05% at 28576 as investors looked ahead to a key batch of U.S. economic data to gauge
how it will impact the Federal Reserve's view on monetary policy. Gold has been well-supported in recent weeks as fading
expectations for a third Fed rate hike this year combined with deepening political turmoil in the White House. India's gold imports
will likely drop in the second-half of the year from the first six months after jewellers rushed to stock up ahead of new taxes
introduced on July 1, the World Gold Council said. Faltering appetite in a country where gold is used in everything from
investment to wedding gifts could rein in a rally in global prices, trading near their highest level in seven weeks. India is the
world's No.2 gold consumer. The country's demand for the metal in the first-half rose 30 percent from a year ago to 298.4 tonnes,
but imports during the period more than doubled to 518.6 tonnes, the WGC said in a report. Indian gold demand is expected to
remain subdued for a few weeks as "consumers who have recently purchased are unlikely to do so again in the short term. India
raised import duties on the metal to 10 percent in a series of hikes to August 2013, looking to curb demand to narrow a gaping
current account deficit. The Perth Mint's sales of gold products rose 23 percent in July. Sales of gold coins and minted bars
increased to 23,675 ounces in July from 19,259 ounces a month ago. Technically MCX Gold is getting support at 28429 and below
same could see a test of 28283-28104 levels, and Resistance is now likely to be seen at 28657, a move above could see prices
testing 28739-28945 in near-Term.
Chart Details - On the Above given daily chart of Gold has Applied the Bollinger Band along with Parabolic SAR, Retail trader
data shows 62.0% of traders are net-long with the ratio of traders long to short at 1.63 to 1. The percentage of traders net-long is
now its lowest since Mar 31 when it traded near 1248.9. The number of traders net-long is 1.1% lower than yesterday and 11.3%
lower from last week, while the number of traders net-short is 25.3% higher than yesterday and 45.2% higher from last week. We
typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to
fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current
Spot Gold price trend may soon reverse higher despite the fact traders remain net-long. Technically MCX Gold is getting support at
28429 and below same could see a test of 28283-28104 levels, and Resistance is now likely to be seen at 28657, a move above
could see prices testing 28739-28945 in near-Term.
Monday 07 August 2017
SILVER -Silver also settled down 0.23% at 38027 on MCX as investors looked ahead to U.S. employment data to gauge how it
will impact the Federal Reserve's view on monetary policy. The number of Americans filing for unemployment benefits fell last
week, pointing to a tightening labour market that likely keeps the Federal Reserve on course to announce plans next month to start
reducing its massive bond portfolio. The U.S. economy is on track to expand at a 4.0 percent annualised pace in the third quarter
with inventory investment contributing 1.12 percentage points to growth, the Atlanta Fed's GDP Now forecast model showed on
Thursday. A flurry of data in coming weeks should show steady growth in China in July, though the potential for increased trade
friction with the United States poses a risk to the world's second-largest economy as it navigates a tighter policy environment. The
Bank of England kept interest rates at a record low again on Thursday and cut its forecasts for growth and wages as it warned that
Brexit was weighing on the economy. The Perth Mint's sales of silver sales declined for the first time in three months, the mint
said. Silver sales during the month slipped about 4 percent to 1,167,963 ounces, compared with 1,215,071 ounces in June. Investors
were turning their attention to upcoming U.S. nonfarm payrolls data for fresh clues on the timing of the Fed's balance sheet
reduction and its ability to raise interest rates again this year. Technically Silver market is under fresh selling as market has
witnessed gain in open interest by 0.31% to settled at 18031, now Silver is getting support at 37693 and below same could see a
test of 37358 level, And resistance is now likely to be seen at 38231, a move above could see prices testing 38434.
Detail of Chart -Technically On the weekly chart, silver prices are trading within swing pattern making lower highs and lower
bottoms. On the other hand, prices’ failure to surpass 61.8% retracement level of 39000 is indicating stiff resistance at higher levels.
The momentum indicator RSI has tested the resistance line and is slipping from the same also indicates bearish momentum.
Technically Silver market is under fresh selling as market has witnessed gain in open interest by 0.31% to settled at 18031, now
Silver is getting support at 37693 and below same could see a test of 37358-37125 level, And resistance is now likely to be seen at
38231, a move above could see prices testing 38434-38652 levels.
✍ MCX DAILY LEVELS
✍ MCX WEEKLY LEVELS
✍ FOREX DAILY LEVELS
✍ FOREX WEEKLY LEVELS
✍ NCDEX DAILY LEVELS
JEERAUNJHA 18-AUG -2017
✍ NCDEX WEEKLY LEVELS
MCX - WEEKLY NEWS LETTERS
✍ INTERNATIONAL UPDATES ( BULLION & ENERGY )
Gold prices edged higher in Asia on Tuesday with a weaker dollar bringing on physical buying interest in
India and China, the world's top two importers, ahead of China trade data later in the day. Gold futures
for December delivery on the Comex division of the New York Mercantile Exchange rose 0.11% to
$1,266.03 a troy ounce. China is expected to report exports rose 10.9% in July year-on-year, down from
an 11.3% gain in June, while imports rose 16.6%, compared to a 17.2% increase in the previous month for
a trade balance surplus of $46.08 billion, wider than the $ 42.77 billion in June. Overnight, gold prices
traded slightly above breakeven on Monday, bouncing off session lows after the dollar came under
pressure following comments from a top Federal Reserve official. Gold continued to pare losses,
following a slump on Friday on the back of strong nonfarm payrolls data suggesting the U.S. economy
could sustain further rate hikes while St. Louis Fed President James Bullard said that low interest rates are
“likely to remain appropriate” over the near term. "The current level of the policy rate is likely to remain
appropriate over the near term," Bullard said in slides prepared ahead of a speech to the America's Cotton
Marketing Cooperatives 2017 Conference in Nashville, Tennessee. Gold is sensitive to moves in U.S.
rates, which lift the opportunity cost of holding non-yielding assets such as bullion. Inflation data later in
the week, however, are expected to provide the yellow metal with fresh direction, as market participants
are keen to establish whether the slowdown in inflation has continued unabated. The slowdown in
inflation, has weighed on the prospect of rate hikes later this year, pressuring both the dollar and bond
yields while helping the yellow metal trade close to seven-week highs. The producer price index and the
consumer price index data are slated for Thursday and Friday respectively. A slump in trading volumes
due to the holidays, however, is expected to keep gold prices range bound.
Gold prices drifted lower on Monday, as market players looked ahead to a busy week of economic data,
including monthly inflation indicators, for further clues on the timing of the next Federal Reserve rate
hike. Besides the inflation data, this week's calendar also features reports on JOLTS job openings,
nonfarm productivity and unit labor costs, producer prices as well as weekly jobless claims. Investors will
also keep an eye out on a number of Fed speakers for any new insight on when and how the central bank
plans to pare back its massive balance sheet, with most of the focus falling on comments from New York
Fed President William Dudley. Markets remain skeptical the Fed will raise rates in December, according
to Investing.com’s Fed Rate Monitor Tool, due to worries over the subdued inflation outlook, but it is
widely expected to start the process of reducing its balance sheet by September. Focus this week will also
be on headlines coming out of Washington, even as Congress slows down for August recess. The
investigation into U.S. President Donald Trump campaign's ties to Russia will remain on the agenda.
Comex gold futures for August were at $1,262.96 a troy ounce by 2:45AM ET, down $1.60, or about
0.1%. It touched its lowest since July 26 at $1,259.80 on Friday, as the dollar jumped after a key report on
payrolls in July showed U.S. employers hired more workers than expected.
Gold prices fell in early Asia on Monday with attention on the dollar after gains last week on renewed
views the Fed may hike for a third time this year. Gold for August delivery fell 0.16% to $ 1,262.52 on
the Comex division of the New York Mercantile Exchange. Ahead in the week, Friday’s U.S. inflation
figures are seen as key as are comments by Fed speakers on interest rate and balance sheet unwinding
views. Last week, gold prices fell on Friday as a solid U.S. employment report for July revived
expectations for another interest rate increase by the Federal Reserve this year. In Asia, The AIG
Construction index rose to 60.5 in July from 56.0 in June, a major boost. Japan reported its foreign
reserves data for July with figures standing at $ 1.260 trillion from $ 1.260 trillion in June. The Labor
Department reported Friday that the U.S. economy added 209,000 jobs last month, beating expectations
for a gain of 183,000 and the unemployment rate ticked down to 4.3%. The report also showed that
average hourly earnings increased by 9 cents or 0.3% last month to $ 26.36 an hour, the largest monthly
increase since October. Wages increased by 2.5% on a year-over-year basis, matching June’s increase. The
uptick in wage growth indicated that inflationary pressures are firming. Markets believe stronger inflation
will enable the Fed to stick to its plans for a third interest rate hike this year. Expectations of a faster pace
of rate increases tend to weigh on gold, which is denominated in dollars and struggles to compete with
yield-bearing assets when borrowing costs rise. Gold prices are up around 9% this year, lifted in part by
expectations that the Fed will take a gradual path toward tightening monetary policy.
Gold discounts in India widened to their highest in over 10 months and premiums in other major Asian
centres edged lower on the back of sluggish demand across markets due to rallying global prices. In India,
dealers were offering bullion imported from South Korea without paying custom duty at lower prices
prompting higher than usual imports from the country. "Due to the free trade agreement signed with South
Korea, importers don't need to pay import duty for gold imported from that country. That's why importers
could offer huge discount. Dealers in India were offering a discount of up to $11 an ounce this week over
official domestic prices, the highest since Sept. 24, 2016. Last week they were offering a discount of $4.
The domestic price includes a 10 percent import tax. "Retail demand is subdued. It will remain weak in
the first half of August unless prices correct sharply," said a Mumbai-based dealer with a private bank.
India's gold imports will likely drop in the second-half of the year from the first six months after jewellers
rushed to stock up ahead of new taxes introduced on July 1, the World Gold Council said on Thursday.
demand is expected to remain subdued in India for a few weeks as "consumers who have recently
purchased are unlikely to do so again in the short term.
Gold prices held steady on Friday, as investors awaited the release of highly-anticipated U.S. employment
data due later in the day, although recent data and ongoing political tensions in the U.S. continued to
weigh on the greenback. On the Comex division of the New York Mercantile Exchange, gold futures for
August delivery were down steady at $1,268.66, very close to Tuesday’s seven-week highs of $1.273,30.
The August contract ended Thursday’s session 0.13% higher at $1,266.40 an ounce. Futures were likely to
find support at $1,256.60, Thursday’s low and resistance at $1,273.30, Tuesday’s high. The dollar
remained under pressure after the Institute for Supply Management on Thursday said its index of nonmanufacturing activity fell to 53.9 from 57.4 in June. Economists had forecast a reading of 57.0. A
separate report showed that U.S. initial jobless claims decreased by 5,000 to 240,000 last week, compared
to expectations for a 3,000 fall to 242,000. Investors were now looking ahead to the nonfarm payrolls
report for July, due later Friday, to gauge whether the U.S. economy is strong enough for the Fed to stick
to its planned tightening path. The greenback has been under pressure recently amid worries over political
turmoil in Washington and recent lackluster economic reports, which have raised doubts over whether the
Federal Reserve will raise rates again this year.
Gold dipped in Asia on Friday with nonfarm payrolls ahead expected to set dollar direction seen as crucial
for overseas buyers from major importers such as India and China. Gold futures for August delivery on
the Comex division of the New York Mercantile Exchange fell 0.39%, to $1,266.89 a troy ounce.
Overnight, Gold prices traded slightly below break even but remained close to seven-week highs on
Thursday as investors awaited nonfarm payrolls data for clues about the strength of the economy amid a
dip in expectations the Federal Reserve will keep to its plan to raise rates once more this year. Gold
struggled to for direction in early morning U.S. trade, as investors remained cautious of initiating large
positions in the yellow-metal ahead of nonfarm payroll data on Friday, expected to provide further clues
on the outlook for interest rate increases. Gold is sensitive to moves in U.S. rates, which lift the
opportunity cost of holding non-yielding assets such as bullion. Gold has edged higher in recent weeks, as
investor uncertainty concerning the pace of U.S. interest rate increases continued amid a raft of mixed
economic data fuelling expectations that the Federal Reserve could backtrack on its plan to raise rates
later this year. The U.S. labor market continued to show signs of tightening, after initial claims for state
unemployment benefits decreased 5,000 to a seasonally adjusted 240,000 for the week ended July 29, the
Labor Department said on Thursday.
Gold steadied on Thursday, hovering below Tuesday's seven-week high, as investors awaited U.S. jobs
data for further clues on the outlook for interest rates. Gold rallied through most of July as the dollar fell
on reduced expectations for a third U.S. rate increase this year. Inflation has been contained even though
the labor market appears to be in its best shape in many years and despite double-digit U.S. earnings
growth in the second quarter. Reduced rate rise expectations tend to weaken the dollar, making dollarpriced gold cheaper for non-U.S. investors. The dollar fell against the yen, euro and Swiss franc, after
weaker-than-expected U.S. services sector data worried investors and stoked doubts that the Federal
Reserve would raise interest rates again in 2017. gold XAU= was 0.15 percent higher at $ 1,268.15 an
ounce by 2:02 p.m. EDT, not far from Tuesday's seven-week high of $1,273.97. In early Asian trade, it