GOLD
OUR HEAD LINE "CLOSE ABV 12475 TEST 12600-700-800" ACHIEVED book profit on buy abv 12425/12475/12660, for the day buy abv 12850 S/L 12830 and T/p 12900-925/13000 OR buy ard 12610-15 S/L 12600 and T/p 12660-690 upto 12750 (any time close above 12850/13100/13425 bullish while close below 12300/11725/11460/11150/11000-10925 bearish for medium term)
SILVER
OUR WORDS "close above 24500 test 25000-50 atleast in coming days" ACHIEVED. book profit on buy abv 23725/850/24450-500, for the day buy abv 25000 S/L 24910 and T/p 25100-200 upto 25400 OR buy ard 24675-80 S/L 24650 and T/p 24750-850 (any time close below 23300/ 22750-300/21575-500/20400/19250/18775 bearish rally while close above 25000/26300/27700 bullish for medium term)
CRUDE
book profit on buy abv 5400/5500, for the day buy only abv 5675 S/L 5645 and T/p 5710-40 upto 5780 OR sell below 5590 S/L 5615 and T/p 5550-55/20/ 5475/down rally (now crude need to close above 5675 for bullish rally while close below 5460/5310/5120/5050/4740/ 4450 bearish for medium term)
COPPER
book profit on buy abv 346.5-347/351, for the day buy only abv 354.5 & 355.5 S/L 353.25 and T/p 356.5/358/361-361.5/close above test 372-375 atleast in coming days OR sell below 347 S/L 348.6 and T/p 345.5-343.5/341 where good support seen again, fall below 338-336/330 down rally sharp (upside strong rally only on close above 361.5 while close below 340.5/336/330-326.5/310 bearish for medium term)
MCXARUN
9994500540
Thursday, May 22, 2008
energy intraday
Energy
22 May 2008 10:33:35
Major Headlines:
Oil hit a record above $132 as U.S. crude and gasoline stocks fell ahead of the peak demand-driving season, which officially kicks off next week. In a weekly report issued by the Energy Information Administration, crude oil stocks plunged 5.4 million barrels last week against market calls for a modest rise. Gasoline stocks also fell sharply, by 800,000 barrels against predictions for a 200,000-barrel decline, ahead of the driving season.
The U.S. consumes roughly 20.5 mln barrels per day, this means that if recent price increases are sustained, the cost of energy to U.S. consumers will increase by about $300 billion over the next twelve months.
Expected strong diesel demand from China after the Asian nation suffered a devastating earthquake last week and higher gasoline purchases from the U.S., the world's biggest energy consumer, ahead of the driving season also lifted crude's value.
Meanwhile, on the supply side, Opec ministers have said again that an output Increase is unlikely; that the cartel is not responsible for higher prices and that it will not meet before September
OPEC's secretary-general said that the world oil market is well supplied, even as the price for a barrel of oil soared above $131 for the first time. OPEC chief Abdullah Salem el-Badri met Tuesday in Caracas with Venezuelan President Hugo Chavez. Venezuela's state-run news agency quotes El-Badri as saying "there's no scarcity of oil in the market" because international oil supplies are very high
The euro surged on Wednesday to its highest in nearly a month against the dollar after a key German survey of confidence showed a surprise improvement. Such dollar weakness is also boosting crude oil
Natural gas in New York advanced as crude oil surged to a record and Stockpiles of natural gas rose 86 billion cubic feet for the week ended May 16, according to the median of 16 analyst estimates compiled by Bloomberg. The average change for the same week of the year over the past five is an increase of 91 billion cubic feet, according to U.S. Energy Department data
MCX Crude Oil June (Daily Chart)
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
Market is expected to remain positive and the resistance is seen at 5735 levels. If market breaches 5735 may see prices to take further upside towards 5811 and 5946 however if it holds back below 5524 may see prices to fall further on today. Major support is seen at 5389 and 5313
Recommendations-MCX Crude Oil June: Buy at 5610 Target 5680 and 5760 Stop loss 5475
MCX Natural gas May (Daily Chart)
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
Market is expected to remain positive and the resistance is seen at 510.60 levels. If market breaches 510.60 may see prices to take further upside towards 516.30 and 526.60 however if it holds back below 494.60 may see prices to fall further on today. Major support is seen at 484.30 and 478.60
Recommendations-MCX Natural Gas June: Buy at 501 Target 504 and 510 Stop loss at 497
MCXARUN
9994500540
22 May 2008 10:33:35
Major Headlines:
Oil hit a record above $132 as U.S. crude and gasoline stocks fell ahead of the peak demand-driving season, which officially kicks off next week. In a weekly report issued by the Energy Information Administration, crude oil stocks plunged 5.4 million barrels last week against market calls for a modest rise. Gasoline stocks also fell sharply, by 800,000 barrels against predictions for a 200,000-barrel decline, ahead of the driving season.
The U.S. consumes roughly 20.5 mln barrels per day, this means that if recent price increases are sustained, the cost of energy to U.S. consumers will increase by about $300 billion over the next twelve months.
Expected strong diesel demand from China after the Asian nation suffered a devastating earthquake last week and higher gasoline purchases from the U.S., the world's biggest energy consumer, ahead of the driving season also lifted crude's value.
Meanwhile, on the supply side, Opec ministers have said again that an output Increase is unlikely; that the cartel is not responsible for higher prices and that it will not meet before September
OPEC's secretary-general said that the world oil market is well supplied, even as the price for a barrel of oil soared above $131 for the first time. OPEC chief Abdullah Salem el-Badri met Tuesday in Caracas with Venezuelan President Hugo Chavez. Venezuela's state-run news agency quotes El-Badri as saying "there's no scarcity of oil in the market" because international oil supplies are very high
The euro surged on Wednesday to its highest in nearly a month against the dollar after a key German survey of confidence showed a surprise improvement. Such dollar weakness is also boosting crude oil
Natural gas in New York advanced as crude oil surged to a record and Stockpiles of natural gas rose 86 billion cubic feet for the week ended May 16, according to the median of 16 analyst estimates compiled by Bloomberg. The average change for the same week of the year over the past five is an increase of 91 billion cubic feet, according to U.S. Energy Department data
MCX Crude Oil June (Daily Chart)
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
Market is expected to remain positive and the resistance is seen at 5735 levels. If market breaches 5735 may see prices to take further upside towards 5811 and 5946 however if it holds back below 5524 may see prices to fall further on today. Major support is seen at 5389 and 5313
Recommendations-MCX Crude Oil June: Buy at 5610 Target 5680 and 5760 Stop loss 5475
MCX Natural gas May (Daily Chart)
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
Market is expected to remain positive and the resistance is seen at 510.60 levels. If market breaches 510.60 may see prices to take further upside towards 516.30 and 526.60 however if it holds back below 494.60 may see prices to fall further on today. Major support is seen at 484.30 and 478.60
Recommendations-MCX Natural Gas June: Buy at 501 Target 504 and 510 Stop loss at 497
MCXARUN
9994500540
basemetals intrday
Base Metals
22 May 2008 10:21:03
Copper Copper fell for the second time in three days as rising inventories of the metal signal slowing demand in China and the U.S., the world's two biggest users.
Inventories monitored by London Metal Exchange have jumped 13 percent this month and today reached the highest level since March 17. China reported this month that its copper imports dropped 19 percent in the first quarter from a year earlier.
The price has dropped 12 percent since reaching a record May 5.The dollar fell as much as 0.5 percent against a weighted basket of the euro, yen and four other major currencies. The gauge has dropped 5.6 percent this year before today, helping to spur a jump in copper prices as traders sought a store of value.
WBMS Report:
The world copper market was in a surplus of less than 4,000 metric tons during the first quarter of 2008, the World Bureau of Metal Statistics said Wednesday. This compares with a deficit of 89,700 tons for the same period of 2007. Copper mine production for the first three months of the year was 3.66 million tons, 4% lower than in January to March 2007. Refined production rose 2.1% to 4.50 million tons.
ICSG Report
The global copper market was in a 60,000 metric ton deficit in February this year, leaving the market in a 60,000-ton deficit for the first two months of 2008, the International Copper Study Group said in a release late Wednesday.
MCX Copper June - Technical Outlook:
The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Market is expected to remain negative and the support is seen at 348.2 If market breaches below 348.2 may see prices to take further correction towards 346.1 and 344.1 However if it holds back above 352.3 may see prices to rise further on today. Major resistance is seen at 354.3 and 356.4
Recommendations-MCX Copper June: Sell at 351 Target 348, 346 and 344 SL 353.50
Nickel
MCX Nickel May traded very weak following LME movement while LME Inventory data and WBMS report were positive for the market.
WBMS Report: Nickel deficit in Q1 was 9,300 tons, WBMS says
Nickel warehouse stock at LME, net change was -150 MT to 49128 MT
MCX Nickel May - Technical Outlook:
The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Market is expected to remain negative and the support is seen at 1062.0 if market breaches below 1062.0 may see prices to take further correction towards 1044.0 and 1018.0; however if it holds back above 1106.0 may see prices to rise further on today. Major resistance is seen at 1132.0 and 1150.0
Recommendations: MCX Nickel May: Sell at 1085 Target 1060 and 1040 SL 1096
Zinc
Zinc declined on the London Metal Exchange on expectations that output cuts in China after last week's earthquake would have little effect on global supply. MCX Zinc May traded bearish following other metals; market was down by almost 3%.
Production may drop by 60,000 metric tons, or 1.5 percent of this year's estimated output, because of smelter damage, Beijing Antaike Information Development Co. said yesterday. The May 12 quake in Sichuan, China's strongest in 58 years halted some metals production in the region.
Chinese zinc miners in Sichuan province have halted ore production on government orders after the quake, according to researcher CBI China Co. Lead miners in the region are almost certain to have halted too, according to Beijing Antaike Information Development Co. Sichuan, Shaanxi and Gansu together produce around 20 percent of the nation's zinc and lead concentrate, 20 percent of the nation's refined zinc yet very little of the lead metal.
WBMS Report: lead deficit 31,000 tons; zinc surplus 84.500 tons, WBMS says
Zinc warehouse stock at LME, net change was -75 MT to 128150 MT
MCX Zinc May - Technical Outlook:
The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Market is expected to remain negative and the support is seen at 93.0 If market breaches below 93.0 may see prices to take further correction towards 91.7 and 89.9 However if it holds back above 96.1 may see prices to rise further on today. Major resistance is seen at 97.9 and 99.2
Recommendations- MCX Zinc May: Sell at 94 Target 92 and 91 SL 95.20
Lead
MCX Lead May dropped by 2% following other metals at LME, market traded near days low of 90.55, while WBMS report was bullish for prices.
WBMS Report: LEAD DEFICIT 31,000 TONS, ZINC SURPLUS 84.500 TONS, WBMS SAYS
Lead warehouse stock at LME, net change was -600 MT to 63850 MT
MCX Lead May -Technical outlook:
The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Market is expected to remain negative and the support is seen at 90.3 If market breaches below 90.3 may see prices to take further correction towards 89.3 and 88.1 However if it holds back above 92.6 may see prices to rise further on today. Major resistance is seen at 93.8 and 94.8
Recommendations –MCX Lead May: Sell at 92.40 Target 90.50 and 89 SL 93.30
Aluminium
MCX Aluminium May traded strong following bullishness at LME despite the fact other metals traded very weak.
WBMS Report
The global Aluminium market was in a 381,000 metric ton surplus in the first quarter of 2008, the World Bureau of Metal Statistics said Wednesday.
This compares with a 116,000 ton surplus in the same period last year. Demand for primary Aluminium was 9.31 million tons, 379,000 tons more than the equivalent total for January to March 2007. Production rose 643,000 tons to 9.69 million tons during the same period, the WBMS said.
Alum warehouse stock at LME, net change was 3900 MT to 1065625 MT
MCX Aluminium May -Technical outlook:
The daily stochastics have crossed over up which is a bullish indication. The stochastics 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.
Market is expected to remain positive and the resistance is seen at 129.1 levels. If market breaches 129.1 may see prices to take further upside towards 130.6 and 132.6 however if it holds back below 125.6 may see prices to fall further on today. Major support is seen at 123.6 and 122.1
Recommendations–MCX Aluminium May: Buy at 127.40 Target 128.60 and 130 SL 126.4
MCXARUN
9994500540
22 May 2008 10:21:03
Copper Copper fell for the second time in three days as rising inventories of the metal signal slowing demand in China and the U.S., the world's two biggest users.
Inventories monitored by London Metal Exchange have jumped 13 percent this month and today reached the highest level since March 17. China reported this month that its copper imports dropped 19 percent in the first quarter from a year earlier.
The price has dropped 12 percent since reaching a record May 5.The dollar fell as much as 0.5 percent against a weighted basket of the euro, yen and four other major currencies. The gauge has dropped 5.6 percent this year before today, helping to spur a jump in copper prices as traders sought a store of value.
WBMS Report:
The world copper market was in a surplus of less than 4,000 metric tons during the first quarter of 2008, the World Bureau of Metal Statistics said Wednesday. This compares with a deficit of 89,700 tons for the same period of 2007. Copper mine production for the first three months of the year was 3.66 million tons, 4% lower than in January to March 2007. Refined production rose 2.1% to 4.50 million tons.
ICSG Report
The global copper market was in a 60,000 metric ton deficit in February this year, leaving the market in a 60,000-ton deficit for the first two months of 2008, the International Copper Study Group said in a release late Wednesday.
MCX Copper June - Technical Outlook:
The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Market is expected to remain negative and the support is seen at 348.2 If market breaches below 348.2 may see prices to take further correction towards 346.1 and 344.1 However if it holds back above 352.3 may see prices to rise further on today. Major resistance is seen at 354.3 and 356.4
Recommendations-MCX Copper June: Sell at 351 Target 348, 346 and 344 SL 353.50
Nickel
MCX Nickel May traded very weak following LME movement while LME Inventory data and WBMS report were positive for the market.
WBMS Report: Nickel deficit in Q1 was 9,300 tons, WBMS says
Nickel warehouse stock at LME, net change was -150 MT to 49128 MT
MCX Nickel May - Technical Outlook:
The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Market is expected to remain negative and the support is seen at 1062.0 if market breaches below 1062.0 may see prices to take further correction towards 1044.0 and 1018.0; however if it holds back above 1106.0 may see prices to rise further on today. Major resistance is seen at 1132.0 and 1150.0
Recommendations: MCX Nickel May: Sell at 1085 Target 1060 and 1040 SL 1096
Zinc
Zinc declined on the London Metal Exchange on expectations that output cuts in China after last week's earthquake would have little effect on global supply. MCX Zinc May traded bearish following other metals; market was down by almost 3%.
Production may drop by 60,000 metric tons, or 1.5 percent of this year's estimated output, because of smelter damage, Beijing Antaike Information Development Co. said yesterday. The May 12 quake in Sichuan, China's strongest in 58 years halted some metals production in the region.
Chinese zinc miners in Sichuan province have halted ore production on government orders after the quake, according to researcher CBI China Co. Lead miners in the region are almost certain to have halted too, according to Beijing Antaike Information Development Co. Sichuan, Shaanxi and Gansu together produce around 20 percent of the nation's zinc and lead concentrate, 20 percent of the nation's refined zinc yet very little of the lead metal.
WBMS Report: lead deficit 31,000 tons; zinc surplus 84.500 tons, WBMS says
Zinc warehouse stock at LME, net change was -75 MT to 128150 MT
MCX Zinc May - Technical Outlook:
The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Market is expected to remain negative and the support is seen at 93.0 If market breaches below 93.0 may see prices to take further correction towards 91.7 and 89.9 However if it holds back above 96.1 may see prices to rise further on today. Major resistance is seen at 97.9 and 99.2
Recommendations- MCX Zinc May: Sell at 94 Target 92 and 91 SL 95.20
Lead
MCX Lead May dropped by 2% following other metals at LME, market traded near days low of 90.55, while WBMS report was bullish for prices.
WBMS Report: LEAD DEFICIT 31,000 TONS, ZINC SURPLUS 84.500 TONS, WBMS SAYS
Lead warehouse stock at LME, net change was -600 MT to 63850 MT
MCX Lead May -Technical outlook:
The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Market is expected to remain negative and the support is seen at 90.3 If market breaches below 90.3 may see prices to take further correction towards 89.3 and 88.1 However if it holds back above 92.6 may see prices to rise further on today. Major resistance is seen at 93.8 and 94.8
Recommendations –MCX Lead May: Sell at 92.40 Target 90.50 and 89 SL 93.30
Aluminium
MCX Aluminium May traded strong following bullishness at LME despite the fact other metals traded very weak.
WBMS Report
The global Aluminium market was in a 381,000 metric ton surplus in the first quarter of 2008, the World Bureau of Metal Statistics said Wednesday.
This compares with a 116,000 ton surplus in the same period last year. Demand for primary Aluminium was 9.31 million tons, 379,000 tons more than the equivalent total for January to March 2007. Production rose 643,000 tons to 9.69 million tons during the same period, the WBMS said.
Alum warehouse stock at LME, net change was 3900 MT to 1065625 MT
MCX Aluminium May -Technical outlook:
The daily stochastics have crossed over up which is a bullish indication. The stochastics 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.
Market is expected to remain positive and the resistance is seen at 129.1 levels. If market breaches 129.1 may see prices to take further upside towards 130.6 and 132.6 however if it holds back below 125.6 may see prices to fall further on today. Major support is seen at 123.6 and 122.1
Recommendations–MCX Aluminium May: Buy at 127.40 Target 128.60 and 130 SL 126.4
MCXARUN
9994500540
bullion intraday
Bullions
22 May 2008 10:33:21
Bullion
Major Headlines:
Gold traded above $930 per ounce, following its near $12 rally the previous day, with mounting concerns over rising inflation keeping the precious metal well supported. Oil prices jumped to a fresh record high above $132 a barrel this morning, its encouraged investors to buy into bullion as a means of hedging against the effects of rising fuel costs.
Weakness in the U.S. dollar is also providing support to gold, as the precious metal serves as an alternative to the most dominant form of foreign currency reserves, and the interest rate differential between Europe and the US keeps the dollar under pressure and the correlation between oil and euro-dollar has steadily increased over recent years with the cheerleaders of the ECB's inflation dogmatic approach providing the intellectual reasoning for this correlation
Precious metals rallied after a report showed U.S. stockpiles of crude oil unexpectedly dropped, sending the price to more than $132 in New York for this first time. Crude has risen 99 percent in the past year. Heating oil also reached a record yesterday
Gold demand dropped to a five-year low in the first quarter as record prices and a slowing U.S. economy reduced purchases in every application for the metal except investment funds, the producer-funded World Gold Council said,
However, rising inflation fears in the United States could force the Federal Reserve to draw a halt to its interest rate cutting cycle, which may boost the dollar, and weigh on gold. Gains in gold are also being capped by a steep drop in demand from physical investors in the metal, with gold prices increasing by more than $200 per ounce over the last year
Gold demand dropped to a five-year low in the first quarter as record prices and a slowing U.S. economy reduced purchases in every application for the metal except investment funds, the producer-funded World Gold Council said,
Global use of 701.3 metric tons in the first quarter, down 16 percent from a year earlier, was the lowest since the start of 2003, the London-based council said in a report. The only growth was in China, Russia, Vietnam and Egypt. In India, the biggest user, consumption fell 50 percent.
U.S.Economy:
US BUDGET: The House is set to consider a Democratic-drafted fiscal year 2009 budget resolution that purports to bring the federal budget into balance and generate small surpluses in 2012 and 2013
Currencies update:
The ECB has kept its rate at a six-year high of 4 percent since last June and is widely anticipated to maintain its rate until the end of the year as inflation concerns remain to the fore. The single currency has been underpinned of late by hawkish comments from the ECB, which continues to sound worried about inflation.
Last week, ECB president Jean-Claude Trichet said the central bank must be extraordinarily attentive" to inflation and that it "is paying particularly close attention to wage negotiations in the euro area".
MCX Gold June (Daily Chart)
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.
Market is expected to remain positive and the resistance is seen at 12913 levels. If market breaches12913 may see prices to take further upside towards 12995 and 13146 however if it holds back below 12680 may see prices to fall further on today. Major support is seen at 12529 and 12447
Recommendations–MCX Gold June: Buy at 12770 Target 12855 and 12910 Stoploss at 12725
MCX Silver July (Daily Chart)
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.
Market is expected to remain positive and the resistance is seen at 25053 levels. If market breaches 25053 may see prices to take further upside towards 25267 and 25643 however if it holds back below 24463 may see prices to fall further on today. Major support is seen at 24087 and 23873
Recommendations-MCX Silver July: Buy at 24740 Target 24920 and 25140 Stop loss at 24590
MCXARUN
9994500540
22 May 2008 10:33:21
Bullion
Major Headlines:
Gold traded above $930 per ounce, following its near $12 rally the previous day, with mounting concerns over rising inflation keeping the precious metal well supported. Oil prices jumped to a fresh record high above $132 a barrel this morning, its encouraged investors to buy into bullion as a means of hedging against the effects of rising fuel costs.
Weakness in the U.S. dollar is also providing support to gold, as the precious metal serves as an alternative to the most dominant form of foreign currency reserves, and the interest rate differential between Europe and the US keeps the dollar under pressure and the correlation between oil and euro-dollar has steadily increased over recent years with the cheerleaders of the ECB's inflation dogmatic approach providing the intellectual reasoning for this correlation
Precious metals rallied after a report showed U.S. stockpiles of crude oil unexpectedly dropped, sending the price to more than $132 in New York for this first time. Crude has risen 99 percent in the past year. Heating oil also reached a record yesterday
Gold demand dropped to a five-year low in the first quarter as record prices and a slowing U.S. economy reduced purchases in every application for the metal except investment funds, the producer-funded World Gold Council said,
However, rising inflation fears in the United States could force the Federal Reserve to draw a halt to its interest rate cutting cycle, which may boost the dollar, and weigh on gold. Gains in gold are also being capped by a steep drop in demand from physical investors in the metal, with gold prices increasing by more than $200 per ounce over the last year
Gold demand dropped to a five-year low in the first quarter as record prices and a slowing U.S. economy reduced purchases in every application for the metal except investment funds, the producer-funded World Gold Council said,
Global use of 701.3 metric tons in the first quarter, down 16 percent from a year earlier, was the lowest since the start of 2003, the London-based council said in a report. The only growth was in China, Russia, Vietnam and Egypt. In India, the biggest user, consumption fell 50 percent.
U.S.Economy:
US BUDGET: The House is set to consider a Democratic-drafted fiscal year 2009 budget resolution that purports to bring the federal budget into balance and generate small surpluses in 2012 and 2013
Currencies update:
The ECB has kept its rate at a six-year high of 4 percent since last June and is widely anticipated to maintain its rate until the end of the year as inflation concerns remain to the fore. The single currency has been underpinned of late by hawkish comments from the ECB, which continues to sound worried about inflation.
Last week, ECB president Jean-Claude Trichet said the central bank must be extraordinarily attentive" to inflation and that it "is paying particularly close attention to wage negotiations in the euro area".
MCX Gold June (Daily Chart)
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.
Market is expected to remain positive and the resistance is seen at 12913 levels. If market breaches12913 may see prices to take further upside towards 12995 and 13146 however if it holds back below 12680 may see prices to fall further on today. Major support is seen at 12529 and 12447
Recommendations–MCX Gold June: Buy at 12770 Target 12855 and 12910 Stoploss at 12725
MCX Silver July (Daily Chart)
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.
Market is expected to remain positive and the resistance is seen at 25053 levels. If market breaches 25053 may see prices to take further upside towards 25267 and 25643 however if it holds back below 24463 may see prices to fall further on today. Major support is seen at 24087 and 23873
Recommendations-MCX Silver July: Buy at 24740 Target 24920 and 25140 Stop loss at 24590
MCXARUN
9994500540
GENERAL MARKET CONDITIONS
It’s just a crude oil story for precious metals. Nickel got the bashing among the base metals on lack of buyers and lower stop losses getting triggered. Zinc and lead are also trading with a softer bias on expectation that the Chinese earthquake will not prevent a decrease in global surplus. Copper traders are remaining on the sidelines. If and when there is a sustained Chinese demand, copper will zoom quickly and near $9000 (LME). Until Chinese demand does not come up, copper will trade with find sellers on rise. In the short term LME copper has to fall below $7950 for a bear zone.
The US dollar weakened against almost all the major currencies as stronger economic data from around the world highlighted the underperformance of the US economy. Australian, German, Canadian and New Zealand economic data all surprised to the upside. Federal Reserve officials slashed their forecasts for growth this year and raised projections for inflation as minutes revealed growing tension between the two objectives. Most policymakers viewed the decision to cut interest rates last month as a “close call”, the minutes said. Lagging effects of higher crude oil prices could further slowdown the US economy which can result in Fed cut interest rates once again. In the short term the Fed may wait and watch till September before making the next move, i.e., a hike or a cut. Till then the interest rate pause will continue.
Another job firing news, this time from American airlines. American said that it would eliminate flights, cut thousands of jobs and charge most passengers $15 to check a single piece of luggage, as surging oil prices exacerbated the crisis in the US airline industry. The number of employees is yet to be announced. If the new job cuts/firing in the US economy continues, we may see another round of US dollar bashing with the possibility of Euro/Usd trying to break 1.60. For the US dollar to gain, the crude oil price needs to halt its gains and consolidate for a fortnight.
COPPER -- JULY FUTURE -- INTRA DAY PIVOT: $382.8
Intra day as long as copper holds $369 downside will be limited and copper will target $383 and $397.
MCXARUN
9994500540
The US dollar weakened against almost all the major currencies as stronger economic data from around the world highlighted the underperformance of the US economy. Australian, German, Canadian and New Zealand economic data all surprised to the upside. Federal Reserve officials slashed their forecasts for growth this year and raised projections for inflation as minutes revealed growing tension between the two objectives. Most policymakers viewed the decision to cut interest rates last month as a “close call”, the minutes said. Lagging effects of higher crude oil prices could further slowdown the US economy which can result in Fed cut interest rates once again. In the short term the Fed may wait and watch till September before making the next move, i.e., a hike or a cut. Till then the interest rate pause will continue.
Another job firing news, this time from American airlines. American said that it would eliminate flights, cut thousands of jobs and charge most passengers $15 to check a single piece of luggage, as surging oil prices exacerbated the crisis in the US airline industry. The number of employees is yet to be announced. If the new job cuts/firing in the US economy continues, we may see another round of US dollar bashing with the possibility of Euro/Usd trying to break 1.60. For the US dollar to gain, the crude oil price needs to halt its gains and consolidate for a fortnight.
COPPER -- JULY FUTURE -- INTRA DAY PIVOT: $382.8
Intra day as long as copper holds $369 downside will be limited and copper will target $383 and $397.
MCXARUN
9994500540
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