Commodity Daily Outlook – 18 July’2013

BULLION:

Gold prices at the international market are at$1276, slightly down 0.09%. Gold prices might remain on the downside, captivating cues from Fed chairman Bernanke’s comments. SPDR holdings, the largest bullion-backed ETF declined yesterday by 0.16% and closed at 936 tons, backed by the fall in gold prices. As of the derivatives point of view, prices and open interest declined while volumes increased, which point out that the market has lot of traders liquidating their positions from the higher side. This may weigh down on gold prices in today’s session. At the MCX, we anticipate gold prices to open slightly higher. On the other hand, a decline in gold prices in the rest of the session could be noticed. Consequently, investors should remain cautious as there could be some volatility in gold prices in the evening session.

Gold Projected High Range at 26578-26857

Gold Projected Low Range at 26740-26461

Gold Mcx Aug Resistance on Upside at 26690-27023-27356

Gold Mcx Aug Support on Low side at 26132-25907-25574

Gold Trend Deciding Point at 26465

Silver Projected High Range at 40859-41693

Silver Projected Low Range at 41504-40670

Silver Mcx Sep Resistance on Upside at 41169-42217-43265

Silver Mcx Sep Support on Low side at 39502-38882-37835

Silver Trend Deciding Point at 40550

BASE METALS:

In Base Metals we anticipate yesterday’s economic developments to have a positive impact has shown while, US Federal Reserve hinted at continuing the asset purchase program. On the other hand, dovish comments from the Fed Chief and the IMF hinting at an increasing downside risk in China should have a negative impact on base metals in today’s session. At the spot front, the action and refining cost for copper has increased o n the back of higher supply while inventories have also remained weak. In general, we anticipate, amidst the slight weakness in the rupee, base metals should open flat to higher at the MCX and should continue to struggle as the day progresses. Rising Chinese property prices should also limit state spending and might also increase the probability of higher property prices, which should indentation the demands for metals in future.

Copper Projected High Range at 417-422

Copper Projected Low Range at 421-416

Copper Mcx Aug Resistance on Upside at 419-425-431

Copper Mcx Aug Support on Low side at 409-406-399

Copper Trend Deciding Point at 415

Nickel Projected High Range at 831-842

Nickel Projected Low Range at 827-816

Nickel Mcx Jul Resistance on Upside at 837-847-856

Nickel Mcx Jul Support on Low side at 816-803-794

Nickel Trend Deciding Point at 825

CRUDE:

Crude oil prices rise after inventory report and completely negated the mixed to negative cues of the US’ economic data and also eclipsed the dovish remarks from the US Fed Chairman Ben Bernanke, aided by the higher than predictable drop in the above mentioned inventory data. Addition to this, prices also took positive cues from the smart growth in the US refinery utilization rate, which rose 0.4 percent to a total of 92.8 percent for the week ended 12th July. This was better than street estimates of a marginal drop in the utilization rates by 0.2 percent to 0.4 percent during the same period. The same report also showed a by 3.1 million barrels rise in gasoline stocks whereas Distillate stocks, which includes heating oil and diesel without warning jumped 3.9 million barrels. A rise in the gasoline inventory level was almost in-line with our own expectations and was not seen as a big surprise to the markets. Amongst other economic and policy-related developments yesterday, the Fed Chairman in a prepared testimony to the House Financial Services Committee said, its asset purchases “are by no means on a preset course” and could even be expanded should economic conditions warrant .Bernanke defended easing policies and insisted that the Fed will likely stop the bond purchasing plan inmid-2014, with the unemployment rate around 7 percent but, he also emphasized that the monetary policies will also depend on economic data. On the other hand, the IMF said that risks are increasing for the Chinese economy wherein growth this year will trail the forecast, weighing the overall trend down in early morning trade in the Asian equity and commodity markets.

Crude Projected High Range at 6305-6339

Crude Projected Low Range at 6287-6253

Crude Mcx Jul Resistance on Upside at 6325-6354-6382

Crude Mcx Jul Support on Low side at 6256-6216-6187

Crude Trend Deciding Point at 6285

Natural Gas Projected High Range at 218-220

Natural Gas Projected Loe Range at 219-217

Natural Gas Mcx Jul Resistance on Upside at 219-221-224

Natural Gas Mcx Jul Support on Low side at 215-213-210

Natural Gas Trend Deciding Point at 217

Mentha Oil:

Mentha Oil Spot prices at the Barabanki mandi yesterday were Rs 18/kg lower compared to the previous day’s prices, unlike spot prices at the Chandausi and Sambhal mandis which were Rs 18/kg higher compared to the previous day. In all over Barabanki mandis (including Masauli, Rampur, Mehmudabad etc) arrivals stood at 1200-1300 drums (1 drum=180 kg) whereas arrivals at the Chandausi and Sambhal mandis were hovering around 300-400 drums, a little higher than previous day’s arrivals. Ample arrivals at the spot front, coupled with the rise in demand from the pharmaceutical sector and a pick-up in export cues led futures market prices higher. A normal to widespread rainfall could occur in some parts of Uttar Pradesh (IMD forecast), and could limit the arrivals and buyer interest at some of mandis. The weather concerns along with minor export cues ead us to expect that mentha oil futures will remain on a negative note during today’s trading session

Mentha Oil Projected High Range at 924-932

Mentha Oil Projected Low Range at 919-911

Mentha Oil Mcx Jul Resistance on Upside at 929-935-941

Mentha Oil Mcx Jul Support on Low side at 913-903-897

Mentha Oil Trend Deciding Point at 919

TODAY ECONOMIC DATA TOWATCH:

DATE TIME Region Event Period Survey Prior
18-07-2013 13:30 EC ECB Euro-Zone Current Account SA May 19.5B
18-07-2013 14:00 UK Retail Sales Ex Auto Fuel (MoM) Jun 0.20% 2.10%
18-07-2013 18:00 US Initial Jobless Claims 13-Jul 341K 360K
18-07-2013 18:00 US Continuing Claims 6-Jul 2959K 2977K
18-07-2013 19:30 US Philadelphia Fed. Jul 7.8 12.5
18-07-2013 19:30 US Leading Indicators Jun 0.30% 0.10%