comex gold intraday

Gold Outlook July 17, 2008
17 July 2008 12:40:23



A better-than-expected industrial output data from the US and an unexpectedly large increase in US inflation helped the greenback to recover moderately.

According to the data released by the Federal Reserve on Wednesday, output of US factories, mines and utilities increased 0.5% in June, following a 0.7% drop in April and a 0.2% decline in May. But for the quarter as a whole, industrial production was down at a 3.1% annual rate.

The US Labor Department reported that the nation’s Consumer Price Index rose 1.1 % in June to an annual pace of 5.0%, underscoring the Fed concerns about rising inflation and sluggish growth.

Meanwhile, the National Association of Home Builders/Wells Fargo Housing Market Index fell below its previous record low of 18 in June to a new record low of 16 in July, indicating a fall in builder confidence in the US market for newly built single-family homes, for the third consecutive month.

Federal Reserve Chairman Ben Bernanke had said Tuesday that the US economy is facing significant risks to growth. He also urged that Fed must remain particularly alert to any sign that inflation is getting out of control.

The US government's rescue plan for mortgage giants Fannie Mae and Freddie Mac heightened fears about the financial market. On July 13, the government had announced bailout for the two GSE’s (Govt. Sponsored Enterprises).

Oil price continued the previous day’s sharp fall, making a combined loss of over $10 on closing basis in two days, the biggest two-day drop in more than 17 years. A surprise rise in US crude inventories, concerns that slowing economic growth might dampen oil demand and OPEC’s downward revision of world oil-demand growth for 2008 and 2009 affected oil.

Meanwhile, the US trade gap narrowed unexpectedly in May. The US Commerce Department reported a 1.2 % decrease in trade deficit in May to $59.8 billion deficit from the revised $60.5 billion in April.

In economic data released last week, the US Labor Department said initial jobless claims in US fell by 58,000, the largest one-week decline in more than two years, to 346,000 for the week ended July 5. The four-week average of initial claims recorded a decrease of 10,000 from the previous week to 379,250. However, continuing claims rose by 91,000 to reach 3.2 million for the week ended June 28. The four-week average of continuing claims also rose, up 16,500 to 3.13 million, the highest since 2004.

The unemployment rate in US remained at a four-year high of 5.5% in June, according to the release by the Labor Department.

Meanwhile, the US Commerce Department in its final revision to GDP estimates said that the economy grew at a slightly faster pace in the first quarter than originally reported. Real GDP was revised to a 1.0% annual rate in the first three months of the year, up from an originally reported reading of 0.9%.

The US Consumer Confidence fell in June to a 16-year low. According to Conference Board, June consumer confidence index fell to 50.4 from a reading of 58.1 in May.

The recent data from various sectors in the US have given rather mixed hints regarding the economy.

Weekly Outlook (Spot Gold)

Continuation of uptrend expected above $969.30. Resistances are $978, $988, $1002; Supports $955, $947, $940.

Last day DGCX Gold Aug traded in the range $982.30 – $958.90 and closed at $961.10 ($974.30).

TECHNICAL OUTLOOK (Intra-day)

GOLD (Aug) - Bullish above $ 958.70; bearish below $ 953.50

MCXARUN
9994500540

silver intraday

Silver trading range 25704-27016
17 July 2008 11:37:45

Silver has weakened back to the 18.78 area after it failed move above $19.00. The market will look to buy on dips towards 18.46 and likely liquidate only on a move below the May top of 18.34. The gold/silver ratio tried the 52.00 area before falling back to 51.25. Now support for the silver is seen at 25961 and below could see a test of 25704. Resistance is now likely to be seen at 26617, a move above could see prices testing 27016.

Trading Ideas:

TRADING RANGE IS 25704-27016.
BUY SILVER @ 26100-180 SL 25980 TGT 26350-26435-26570-26865. MCX
A BREAK OF 25840 WILL TAKE SUPPORT TILL 25200 LVL
ELSE MKT IS BULLISH TILL THE SAME HIGH.

MCXARUN
9994500540

gold intraday

Gold pulled back today for the first time in 5 days. We are still holding above the minor 955 and major 946 support points, and accordingly our bias remains bullish. The topside resistance is seen to be at 988 with the major target still holding at 1032. Now support for the gold MCX is seen at 13250 and below could see a test of 13135. Resistance is now likely to be seen at 13560, a move above could see prices testing 13755.

Trading Ideas:

TRADING RANGE IS 13135-13755.
SELL GOLD BELOW 13160 SL 13235 TGT 13100-13080-13000. MCX
OR SELL ABOVE 13450 SL 13475 TGT 13400-13360-13280. MCX
IN SPOT 948-950 IS THE GOOD LEVEL FOR BUYING.

MCXARUN
9994500540

GENERAL MARKET CONDITIONS

The US dollar – crude oil - gold relationship is dictating the metals markets. Base metals fell as Chinese demand remains low before the Olympics. Unless physical demand for gold, silver or any other metal rises along with the rise in prices, there will always be fear of a correction or a slide from the highs. Investment demand can change overnight also. Gold, physical demand is virtually zero. Platinum has also fallen on lack of demand. The lagging effects of higher crude oil prices have now started showing their colours.

Some of the world’s largest sovereign wealth funds are seeking to scale back their exposure to the US dollar in a sign of global concern about the currency. One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while China’s State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings. Sovereign wealth funds have played a leading role in helping to recapitalise faltering US banks, but have lost money so far on such investments. Continuing market turbulence has further shaken their faith in US policy and policymakers. The current decline of the US dollar will have long term effects by way of declining share of the US dollar in global trade and financial services.

COPPER -- SEPTEMBER FUTURE

$354 is the key support. Resistance $378. A fall below $354 will result in $347 and $339.

MCXARUN
9994500540

GENERAL MARKET CONDITIONS

Volatility in crude oil started to increase. Yesterday’s boom to bust of crude oil by $10 in less than ten minutes speaks for itself. In gold, silver and copper traders have gotten used to high volatility but crude oil is the new entrant. Managing volatility is the key. Stop losses are useless. Day traders need to buy at market price and sell at market price to limit losses. Bernanke and Bush did not say anything extra ordinary on the US economy. It’s only that traders and fund managers used the same book profits which resulted in a technical sell off. The trend for the US dollar is bearish. There is no doubt over the same. However if the outlook for the Eurozone economy turns cloudy (with continued fall in German consumer confidence and business sentiment), the greenback will benefit. The yen gained on expectations that the bank of Japan will raise interest rates.

Zinc pared most of its gains on doubts whether Chinese production cuts will have any impact on supplies. The current rise however will prevent traders from going too short at lower prices. The fear of a sharp rise will be in their mind. Fund managers invest only when anything is fundamentally bullish. The fundamental story for any commodity does not change overnight while the technical picture can change every hour. Zinc, it’s a fight between fundamental traders and technical traders. Crude oil has a lagging effect. Higher crude oil prices will slowdown the world. If the world slows down why should base metals rise?

We have the US inflation numbers today. At the moment it’s just a technical correction in gold, silver and crude oil. US weekly crude oil numbers will be the key. Crude oil traders will be hesitant to go short heavily as the Iranian risk premium is not over. We continue with a buy on dips strategy as long as key technical supports are holding. Gold August key support $956 and $942. Silver September key support $1848. Copper September resistance $379.10. As long as these prices are held/broken the upside/downside will be limited. As and when prices near the same it should be used to go long/short (as the case may be).

PLATINUM OCTOBER -- INTRA DAY PIVOT $2055.0

Platinum needs to break $2055 to be in a bullish zone. Till it does not break $2055, there will be sellers.

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

Failure to break 1605 will result in a fall to 1542 and 1512.


MCXARUN
9994500540

zinc intraday

Zinc buy above 80.60
10 July 2008 11:30:42

Zinc yesterday we have seen that market has moved 3.5%. Market has opened at 77.35 & made a low of 77.1 versus the day high of 80.3. The total volume for the day was at 8430 lots and the open interest was at 6449.Now support for the zinc is seen at 77.9 and below could see a test of 75.9. Resistance is now likely to be seen at 81.1, a move above could see prices testing 82.3.

Trading Idea

• TRADING RANGE IS 75.90-83.00.
• BUY ZINC ABV 80.60 SL 79.80 TGT 81.20-81.80-82.40. MCX
• SELL ZINC BELOW 79.00 SL 79.60 TGT 78.55-78.10-77.60. MCX
• A TRADE ABV 80.60 COULD JUMP TILL 82.50 ELSE WEAK

MCXARUN

nickel intraday

Sell nickel below 912
10 July 2008 11:31:29

Yesterday the LME nickel stock was -138 against the previous of -12 Nickel has touched a low of Rs 896.5 a kg after opening at Rs .902, and last traded at Rs 932.5.For today market is looking for the support at 907, a break below could see a test of 882 and where as resistance is now likely to be seen at 947, a move above could see prices testing 961.

Trading Ideas

• TRADING RANGE IS 882-961.
• BUY NICKEL @ 920-922 SL 912 TGT 926.50-932.50-938-945. MCX
• SELL NICKEL BELOW 912 SL 923 TGT 905-900-892-884. MCX

MCXARUN