Zinc intraday

MCX Zinc June registered days high near 84.30 and closed with minor loss at 82.30, Intra day low registered near 81.55

LME zinc may not get significant upside in next 12 months, although prices will likely be volatile because of large short position in LME zinc futures.

Global concentrate supply not tight enough to restrain zinc output for next 6-12 months, which should lead to a growing surplus in zinc market, possibly push prices to test $1,700-$1,800/ton.

Prices could rally short-term if low prices forces mine closures, but producers would likely hedge into any price strength. However, says this period of low prices would likely restrain growth in Chinese zinc mine output in 2009, significantly tightening concentrate market, while major mines expected to end their lives or mine lower ore grades in 2010-2011.

Zinc price falls during the next 12 months, the more it could bring forward the next cyclical boom phase in the market.

Zinc inventories at LME, increased by -750 MT to 151050 MT.

MCX Zinc June - Technical Outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 81.1 levels. If broken can see further fall to 80.0 and 78.4, If market holds above 82.7 further rally can be seen towards 83.9 and 85.5

Recommendations- MCX Zinc June: Sell at 82.50-83.00 Target 81.60 and 80.60 SL 83.90


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lead intraday

MCX Lead traded volatile and registered days high near 81.10, closed at 79.45 with minor loss . Intra day low registered near 78.15

Lead inventories at LME, increased by -725 MT to 95650 MT.

MCX Lead June -Technical outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 78.0 levels. If broken can see further fall to 76.6 and 75.1, If market holds above 79.6 further rally can be seen towards 81.0 and 82.5

Recommendations –MCX Lead June: Sell at 80.20-80.50 Target 79 and 78 SL 81.65

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Nickel intraday

MCX Nickel mostly trades bearish and registered days low at 933, closed at 941.50 with loss of 3.29% from Saturday closing. Intra day high registered near 975.

A large LME nickel market short might be just about to cover and even add length to its portfolio, stirrings of improved demand from the stainless sector, with consumers on the oil side boosting pipe needs ahead of the winter drilling season.

Government's Australian Bureau of Agricultural & Resource Economics forecasts metal will average $27,000/ton in 2008, down 27% on-year, also down from average $28,770/ton in first 4 months of this year. Rising nickel production at new mines, scheduled to commence from mid-2008 is expected to increase nickel supply in 2009," hence forecast price to decline to average $22,000 in 2009.

Australian exports to rise 11% next fiscal year to 236,000 tons from actual 212,000 tons this fiscal year ending June 30, in part reflecting forecast 31% on-year increase in nickel mine production to 256,000 tons next fiscal year.


Nickel inventories at LME, decreased by 126 MT to 46734 MT.


MCX Nickel June - Technical Outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 925 levels. If broken can see further fall to 908 and 883, If market holds above 950 further rally can be seen towards 967 and 992


Recommendations: MCX Nickel June: Sell at 955 Target 922 and 910 SL 965


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copper intraday

MCX Copper gives back its earlier gains and closed at 360.05 with loss of Rs. 2.25 per kg from Saturdays closing, low registered near 356.80. Intra day high was at 364.50

A stronger dollar and weaker precious metals pressured copper futures mildly Monday as opinions are mixed on support for the market from Chinese buyers.

The rise in the dollar and the slide in precious metals spurred long liquidation in copper. Some pressure may also be coming to the market from the overall weakness of the U.S. economy and the belief that the Chinese may be stocked up with the copper they need for now, at least until after the Olympics.

The dollar's strength was constraining the upside potential for copper coming from Chinese demand.

Copper futures were holding at relatively strong levels despite Chinese import data that is pressuring the market. Copper prices remain strong despite coming under pressure from the Chinese trade data which confirmed preliminary data showing refined imports falling 26.4% m/m, Copper scrap imports also came in lower at 496Kt, the lowest in two months, as did copper concentrates, which at 416kt (gross weight), were 17.6% below April levels.


Inventories of copper stored in London Metal Exchange warehouses fell 875 metric tons Monday, leaving them at 123,125. The most recent Comex inventory data, released late Friday afternoon, were unchanged at 11,040 short tons.


MCX Copper June - Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.

Technical are still neutral to bullish and market is expected to remain positive above 364.1 levels. If sustain above this level can see a rally towards 368.2 and 371.8, If market sustains below 360.5 can see a further fall towards 356.4 and 352.8


Recommendations-MCX Copper June: Buy at 358-357.50 target 365 and 371 SL 355.40


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Natural Gas price is zooming

Natural gas prices are up about 75% from the beginning of this year. With all the fuss over crude oil and the cost of food, it’s easy to overlook what a dramatic move this is. But natural gas could have even further to go.

Energy analyst Subash Chandra of Jefferies & Co. tells The Wall Street Journal, “We could see $15 [natural] gas this summer. All the elements are there.”

Two things weighing heavily on natgas traders’ minds right now are hurricanes and heat waves. The first factor (threat of hurricane) could cut into supply by damaging production in the Gulf. The second factor, a rising heat wave, causes demand to go through the roof as sweating Americans turn up their air conditioners.

Natural gas is one of those invisible threads woven throughout our lives. We all make use of it much more than we realize, and the costs hit us in many unrealized ways, too.

The good news is, those costs can be offset by profit opportunities for savvy investors in the natural gas space.


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Will Oil fall below $ 100?

Saudi Arabia said yesterday that it increased oil sales by 300,000 barrels per day in May and would increase it another 200,000 barrels per day in July. The announcement was in line with expectations. August crude oil closed up $1.38 at $136.74.

Nigeria continues to have problems keeping its oil production safe. Late last week, a 120,000 barrel per day Chevron plant was closed after its pipelines were attacked. Earlier last week, a 200,000 barrel per day Shell facility was closed.

Barron's ran an article over the weekend saying that crude oil could fall to $100 per barrel by the end of the year. What would it take for that to happen? Saudi Arabia's announced production increase, slower world demand, and firmer U.S. interest rates to stop the flow of investors bailing out of the dollar.

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energy intraday

Oil prices rose Monday on disappointment over Saudi Arabia's modest production increase and concerns that output from Nigeria will decline. Retail gas prices, meanwhile, inched lower overnight, but appear unlikely to change much as long as oil prices remain stuck in their recent trading range.

Saudi Arabia said Sunday at a meeting of oil producing and consuming nations that it would turn out more crude oil this year if the market needs it. The kingdom said it would add 200,000 barrels per day in July to a 300,000 barrel per day production increase it first announced in May, raising total daily output to 9.7 million barrels.

Nigeria continues to have problems keeping its oil production safe. Late last week, a 120,000 barrel per day Chevron plant was closed after its pipelines were attacked. Earlier last week, a 200,000 barrel per day Shell facility was closed.

Barron's ran an article over the weekend saying that crude oil could fall to $100 per barrel by the end of the year. What would it take for that to happen? Saudi Arabia's announced production increase, slower world demand, and firmer U.S. interest rates to stop the flow of investors bailing on the dollar.

Speculators became the largest players in oil futures markets, nearly doubling their share in the past eight years as prices rose to records, in a ``radical shift'' for the market, according to a congressional committee. In January 2000, speculators controlled 37 percent of contracts to buy West Texas Intermediate crude oil on the NYMEX, with the rest held by physical hedgers, including refiners and airlines that need to hedge against delivered fuel costs. By this April, speculators controlled 71 percent of the contracts, according to data provided to the House Energy and Commerce Committee by the CFTC.

Colombia's main oil pipeline was closed after guerrilla attack on Monday, after a dynamite attack on Saturday by the Farc guerrilla movement, the military authorities said. Some 100,000 barrels per day of crude oil is transported along the 780 kilometer pipeline, which is located in the Tibu area, 650 km northeast of Bogota. The explosive was detonated by remote control by a group of rebels of the Farc (Revolutionary Armed Forces of Colombia).


Natural gas in New York advanced amid speculation a forecast for warmer weather would increase demand. High temperatures, especially in the Northeast and Midwest, the regions of the biggest gas consumption, typically spur more electricity generation from gas-fired power plants to run air conditioners.

MCX Crude Oil July - Technical Outlook:

Tech The daily stochastic have crossed over up which is a bullish indication. The stochastic indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is Negative as the close remains below the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Technicals have turned neutral to bullish and market is expected to remain positive above 5975 level. If sustain above this level can see a rally towards 6050 and 6160 If market sustains below 5865 can see a further fall towards 5790 and 5680

Recommendations-MCX Crude Oil July: Buy at 5832 Target 5895 and 5970 Stoploss 5780

MCX Natural gas July - Technical Outlook:

The daily stochastic have crossed over up which is a bullish indication. The stochastic indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Technicals have turned neutral to bullish and market is expected to remain positive above 576 if sustain above this level can see a rally towards 579 and 586 If market sustains below 569 can see a further fall towards 566 and 559

Recommendations-MCX Natural Gas July: Buy at 565 Target 569 and 574 Stop loss at 561

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bullion intraday

Gold fell in New York by the most in almost two weeks as the dollar strengthened against the euro, reducing the appeal of the precious metal as an alternative investment. Silver also fell

Spot gold tumbled through $900 a troy ounce, which sparked a wave of technical selling Monday that carried the metal down to $876/oz and its falls, which were attributed to large liquidations by CTA accounts in commodities, in particular gold. This liquidation is perhaps related to quarter-end pressures in order to raise cash for client redemption payments.


Gold tends to move in the opposite direction to the dollar as it seen as an alternative investment to the U.S. currency and a hedge against rising inflation. Oil prices have also eased as the dollar has firmed, reducing gold's role as a hedge against rising fuel costs.


The U.S dollar is gaining against the euro as it is still unclear if the Feds will hike or steady rates and on speculation that consumer confidence released today will show a drop, consequently that will negatively affect consumer's confidence. Therefore, at the moment, as the green currency remains weak, investors are still guided straight to the shiny metal.


Australian gold production has fallen by a greater-than-expected 7 percent in the last year its world's third-largest producer of gold behind China and South Africa. Its output is estimated at 231 tones in the year to June 30, against 249 tones the year before.


Platinum assets in Zuercher Kantonal bank's exchange-traded fund climbed 18 percent to a record last week. The 62,353.15 ounces in the ZKB Platinum ETF as of June 20 exceeded the record 54,498.72 ounces of Dec. 29, according to figures e-mailed today from Zurich-based ZKB. Platinum has trailed the company's silver, gold and palladium funds that climbed to all-time highs last month. The platinum assets were up 18 percent from 52,762.58 ounces a week earlier.

U.S.Economy:

The Chicago Federal Reserve's index of national activity improved from -1.23 to -.96 in May, still a sign of contraction. 63 of the 85 indicators used were said to have recorded negative changes.

The Federal Reserve meets today and Wednesday and is expected to keep the federal funds rate unchanged at 2.0%. Traders will be watching for Wednesday afternoon's statement for any clues to future direction.

Currencies update:

The IFO Institute's index of business confidence in Germany fell from 103.5 to 101.3 in June, weaker than expected.

European data yesterday showed that the economic slowdown is accelerating just as the European Central Bank is planning to raise interest rates, leading some traders to bet the ECB will be forced to hold rates steady, pushing the euro lower.


MCX Gold June - Technical Outlook:


The daily stochastic have crossed over up which is a bullish indication. The stochastic indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Technicals are neutral to bearish signaling sideways to lower prices in the near term. Initial support for the market is around 12189 levels. if broken can see further fall to 12098 and 11978 If market holds above 12386 further rally can be seen towards 12457 and 12594

Recommendations–MCX Gold Aug: Sell at 12372 Target 12310 and 12230 Stoploss at 12415

MCX Silver July - Technical Outlook:

The daily stochastic have crossed over up which is a bullish indication. The stochastic indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Technicals are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 23515 levels. if broken can see further fall to 23831 and 23600 If market holds above 23898 further rally can be seen towards 24002 and 24190

Recommendations-MCX Silver July: sell at 23965 Target 23820 and 23700 stoploss at 24130

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GENERAL MARKET CONDITIONS

Lay offs continue in the US with United airways and Citi group announcing. UAL has announced that it will lay off 950 pilots. The layoffs are more in crude oil dependent industries and financials. Crude oil prices are directionless. It may take a few months for demand in emerging markets to fall. At the moment currency traders will be caught between eurozone and US economic growth. Cable will be switched between the US dollar and euro. Markets will be judging the level of hawkishness of Bernanke tomorrow.

Australia’s gold production is expected to fall 7.8% to 231 tonnes in the year to June 30 according to the Australian Bureau of Agricultural and Economic Resources. Australia is the world’s third largest gold producer and although a rebound in output to 256 tonnes is expected in 2008/09, long term (3-5 years) gold supplies will be in deficit. The Central bank Gold Sales agreement (CBGA) will be over by 2010-2011. With no fear of central bank sales gold will have an unending one way rise after CBGA gets over.

PLATINUM OCTOBER -- INTRA DAY PIVOT $2055.0

In the short term platinum can fall to $1980 and thereafter target $2100 and $2192 as long as $2038 and $2019 holds

MCX CARBON CREDIT --NOVEMBER (price in Indian Rupees)

Carbon Credits targets 1454 and 1502 this week as long as 1395 holds.

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