Global outlook – 11th Nov, 2008

Crude continued to dwindle on persistent concerns about curbed demand in a slowing economy as global equities slumped and a stronger dollar added pressure. Crude futures tested below $59 per barrel even after a fresh indication from OPEC of another output cut if prices keep falling. One piece of negative news, such as demand destruction in International Energy Agency report being even worse than expected, or the pull from the large open interest on the $50 puts on the expiring (on Monday) December options and the bottom could fall out. Economic gloom overpowered financial markets again sending global equities and commodities lower. OPEC may cut oil output by another 1 million barrels per day when it meets next month, an OPEC source from one of the group's core members. China's October crude oil imports rose 28.2% from a year ago, fastest since July 2007 and the third-highest daily rate on record, amid a slump in oil prices.

Gold tumbled in the face of a stronger dollar, weaker crude oil and liquidation pressure because of a still-tight credit market. Gold hurt by a higher dollar as a deteriorating global economy and weaker equities cut investor risk appetite. It's difficult to sustain a gold rally until interbank lending improves and liquidation of assets, including gold reduced and dragged down by weaker crude oil that dropped below $60 per barrel on recession worries. Furthermore gold bullion sales by UBS to India increased sharply in the past two weeks, and India's local gold premium suggests demand is strong.

Copper lost more than 7% as demand worries resurfaced; pressuring prices back down to levels seen before Monday's Chinese economic stimulus plan was announced. The euphoria surrounding China's launch of a $600 billion economic stimulus package to shore up its slowing growth fades. China's 4 trillion Yuan ($586 billion) stimulus plan will only have a gradual effect on the country's base metals industry, according to the vice president of the state-controlled China Nonferrous Metals Industry Association. Negative sentiment toward global growth and commodity demand keep the bears fully in control of industrial commodity markets for the foreseeable future. Copper's bearish momentum deepens despite positive trade data from China, the world's leading metals consumer. China's imports of unwrought copper and semi-finished copper products surged to 231,212 tonnes in October, versus September's 213,782 tonnes. Fears of waning demand reflected in steady inventory builds in London Metal Exchange-registered warehouses.

Indian rupee closed at its lowest in a week as a sharp fall in the domestic equity market raised concerns of more foreigners repatriating funds, pressuring the currency lower. Importers were there in the market but most of the demand was from the FIIs. Foreign institutional investors have bought shares worth $500 million in November, but have been net sellers of $12.6 billion so far in 2008.

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Commodity prices will rise again soon

The G-20 meeting in Brazil over the weekend has unwittingly set the foundations for the devaluation of cash, rise of commodity stocks and the turn of the market worldwide.

It does not pay off any more to hoard cash in savings accounts soon paying little more than 1 to 2 per cent. Money has to be diverted to more profitable investments and, in the middle of this development, the turn of the market is in sight.

Among other recommendations, the G-20 meeting, while admiring those Governments which have already taken or going to take bold action, advises Governments to cut interest rates further and to spend. This resonates with President-Elect Obama's plans and his ambitious infrastructure reconstruction programme and China's weekend announcement of a nearly $600 billion investment project for rebuilding houses destroyed in the summer earthquake and still more infrastructure projects: railroads, airports, subways and bridges.

Though in doing so China may wish to benefit from current relatively lower commodity prices, such projects will inevitably lead to revaluation of commodities.

The recent decline of commodities is going to be a short-term story as the same recession that caused the fear of declining construction and reduced use of steel and copper is going to increase the use of these metals.

This could be to colossal proportions through policy developments as more Governments in advanced economies as well as emerging ones start borrowing at low interest rates for a number of projects including re-building railways, roads, bridges and airports in order to keep their populations employed.


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safe trade calls

GOLD

Continue to view, as long Resistance 11825 & 11900, down trend likely to continue. for the day sell below 11525 S/L 11555 and T/p 11485-450/sustain below towards 11300 and close below 11260 test 10750 atleast in coming days OR sell ard 11810-820 S/L 11825 and T/p 11750-710 (any time close above 11900/12375/12850/13600/14325 bullish while close below 11450/11290-250 bearish for medium term)


SILVER

Continue to view as long Resist of 17300/17550 & 17750 down trend likely to continue. for the day sell below 16850 & more below 16800 S/L 16950 and T/p 16730/16575-600/sustain below towards 16300 & 16100 and close below 16100 test 15400 atleast in coming days OR sell ard 17265-280 S/L 17300 and T/p 17200-140 upto 17050 (any time close below 16100-15975 bearish rally while close above 17750/ 19000/20550/21400/22150/25250/ 26350/27475/28000 bullish for medium term)


CRUDE

PRICE TURN EXACT FROM BOTH SIDES AS OUR SUPPORT=2850 & TURN FROM LOW OF 2581 WHILE RESISTANCE WAS 3150 & TURN FROM HIGH=3145. Continue to view, as long Resistance 3150, down trend likely to continue. book profit on sell below 2940, for the day sell only below 2850 S/L 2875 and T/p 2800 OR sell ard 3020-25 S/L 3030 and T/p 2980-65/2940 (now crude need to close above 3150/ 3450/3765/4120/4400/4800/5000/5290 for bullish rally while close below 2850 bearish for medium term)


COPPER

Continue to view, as long Resistance of 199 & 215, down trend likely to continue. for the day sell below 187 S/L 188.50 and T/p towards 184.50/sustain close below towards 165-170 in coming days OR sell ard 196.25-196.50 S/L 197 and T/p 194.50/192.50 (upside strong rally only on close above 215/234.5/ 248/270/305/316/327/339/351.25/ 360.5/387/398 while close below 184.5 bearish for medium term)



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safe trade calls

GOLD

THIS WAS OUR VIEW YESTERDAY "sell ard 11765-70 S/L 11780 and T/p 11710-650" AND SEE PRICE TURN FROM HIGH=11767 AFTER THAT MAKE LOW OF 11450 (SMALL S/L BIG PROFIT) Continue to view, as long Resistance 11775 & 11900, down trend likely to continue. book profit on sell ard 11765, for the day sell only below 11450 S/L 11485 and T/p 11400/towards 11300 OR sell ard 11715-20 S/L 11730 and T/p 11675-600 (any time close above 11900/12375/12850/13600/14325 bullish while close below 11450/11290-250 bearish for medium term)


SILVER


SINCE LAST MANY DAYS OUR VIEW WAS DOWN TREND AND SEE PRICE WAS RALLY ALMOST 5-6 TIMES BUT FAIL TO BREAK OUR LEVEL AND FALL AGAIN SHARPLY. Continue to view as long Resist of 17250/17550 & 17750 down trend likely to continue. for the day sell only below 16725 S/L 16830 and T/p 16575-600/sustain below towards 16300 & 16100 and close below 16100 test 15400 atleast in coming days OR sell ard 17220-230 S/L 17250 and T/p 17150-17000 (any time close below 16100-15975 bearish rally while close above 17750/19000/20550/ 21400/22150/25250/26350/27475/ 28000 bullish for medium term)


CRUDE

THIS WAS OUR VIEW YESTERDAY "sustain close below 3045 test 2900-2890 atleast in coming days" & SEE PRICE MAKE LOW OF 2920. Continue to view, as long Resistance 3150, down trend likely to continue. book profit on sell below 3130, for the day sell only below 2920 S/L 2945 and T/p 2900-2890/sustain below towards 2825 OR sell ard 3060-70 S/L 3075 and T/p 3030-3000 (now crude need to close above 3450/3765/4120/4400/4800/5000/5290 for bullish rally while close below 2920 bearish for medium term)


COPPER


Continue to view, as long Resistance of 196/206 & 215, down trend likely to continue. book profit on sell below 195, for the day sell only below 186 S/L 188 and T/p 184-83/180/sustain close below 186 towards 170-165 in coming days OR sell ard 193.2-193.50 S/L 194 and T/p 191/189 (upside strong rally only on close above 215/234.5/248/270/305/ 316/327/339/ 351.25/360.5/387/398 while close below 186 bearish for medium term)


MCXARUN
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safe trade calls

GOLD

PRICE TURN EXACT FROM OUR GIVEN RESISTANCE=11775 AS DAYS HIGH=11778. Continue to view, as long Resistance 11775 & 11900, down trend likely to continue. book profit on sell below 11575, for the day sell only below 11470 S/L 11505 and T/p 11410/ towards 11300 in coming days OR sell ard 11765-70 S/L 11780 and T/p 11710-650 (any time close above 11900/ 12375/12850/13600/14325 bullish while close below 11470/11290-250 bearish for medium term)


SILVER

Continue to view as long Resist of 17250/17375/17550 & 17750 down trend likely to continue. for the day sell below 16800 S/L 16875 and T/p 16730-675/ 16575/sustain below towards 16250 & 16100 and close below 16100 test 15400 atleast in coming days OR sell ard 17520-530 S/L 17550 and T/p 17375 -250 (any time close below 16100-15975 bearish rally while close above 17750/19000/20550/21400/22150/ 25250/26350/27475/28000 bullish for medium term)


CRUDE

Continue to view, as long Resistance 3320/3375/3420 & 3450, down trend likely to continue. for the day sell below 3130 S/L 3150 and T/p 3095-3100/3070/ 3045/sustain close below 3045 test 2900-2890 atleast in coming days OR sell ard 3250-55 S/L 3260 and T/p 3225-3200 (now crude need to close above 3450/3765/4120/4400/4800/5000/5290 for bullish rally while close below 3040 bearish for medium term)


COPPER


ontinue to view, as long Resistance of 206 & 215, down trend likely to continue. for the day sell only below 195 S/L 197.25 and T/p towards 190-188.50/ sustain close below towards 170 atleast in coming days OR sell ard 202.50-203 S/L 203.50 and T/p 200.75-199 (upside strong rally only on close above 215/ 234.5/248/270/305/316/327/339/ 351.25/360.5/387/398 while close below 195/188.5 bearish for medium term)


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outlook

Gold remained nervous as investors ditched the dollar and moved to commodities and stocks, relieved that election would end the uncertainty of the long U.S. presidential campaign. Gold futures supported as the dollar endured its biggest one-day drop against a basket of currencies in 13 years. A recovery of oil prices due to an output cut by Saudi Arabia, a more optimistic equity outlook and easier credit cited. Bullion also supported by signs that a global recession seemed averted for the moment. U.S. stocks were 3% higher in afternoon trade. Active buying during the Europe sessions and lower Libor rates helped boost gold buying.

Crude tumbled more than $5 after a government inventory report showed gasoline supplies rose unexpectedly last week, even as crude supplies were flat and distillate supplies rose. Crude oil prices have been under pressure due to sliding demand and concern a slow economy will further curb petroleum use. Crude inventories were flat after five consecutive reports of builds, while gasoline stockpiles surged unexpectedly, according to government data. For the week crude-oil inventories remained at 311.9 million barrels, which is 1.5% above year-ago levels, according to the Energy Department's Energy Information Administration in its weekly report. Analysts had expected a boost of 500,000 barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Gasoline inventories surged by 1.1 million barrels, or 0.6%, to 196.1 million barrels, which is 1.3% below year-ago levels. However analysts expected stockpiles of the motor fuel to fall by 1.1 million barrels. Demand for gasoline over the four weeks was 2.3% lower than a year earlier, averaging 9 million barrels a day. At the same time, U.S. refineries ran at 85.3% of total capacity on average, unchanged from the prior week. However analysts expected capacity to rise 0.2% to 85.5%.

Copper shed nearly 6% to lead other industrial metals lower as inventories rose and the strong dollar weighed after the U.S. election. The dollar rose against a basket of major currencies after posting its biggest one-day slide in 13 years as Democrat Barack Obama won the U.S. presidential election. Prices of the metal, used in power and construction, have fallen more than 50% since a record high of $8,940 in July. Poor demand for copper is mirrored by the continuous jumps in inventories. Stocks of the metal in LME registered warehouses jumped 5,825 tonnes, bringing the total to 247,475 tonnes. The stocks have risen more than 35,000 tonnes in the last two weeks alone. The collapse in copper prices since July has forced more than 40 percent of China's refined copper capacity to slow production, and may cost the market as much as 120,000 tonnes in lost metal in 2008. This is equivalent to 3% of China's total copper production or one month of refined imports

Courtesy: Religare Commodities


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target hit

as per our technical chart our first target hit,
we book partial profit, and wait for second target

this is that chart posted last day


contact for intraday & shorttime calls

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