Gold Weekly View
Gold’s fastest run of weekly loss 42 Days since 2004. Despite the US fiscal cliff deal struck to avert the automatic tax hike, a sudden comment from the Fed official about the end of asset purchase triggered terror selling in gold. Week ahead, it is quite tough to decide the trend of gold as the market dynamics is little dubious. Whereas the US debt ceiling is hanging over the head and threat for a probable US rating down gradation should support gold’s upswing, fundamental of gold seems weak. in addition, according to our expectation of a rise in unemployment rate (from 7.7% to 7.8%) may refrain Fed from stopping asset purchase. But all these are time taking phenomenon which all may not work for the very next week. Basically, inventories at the COMEX warehouses have increased slightly by 0.08%. Interestingly, registered stocks (approved and allocated for delivery) have declined by 12.70%, highest since January 2012. This indicates, traders are not willing to take delivery at present moment on anticipation for a further price fall. On the other hand, eligible stocks (it is saleable at some price) have increased by 4.05%, highest in the same period. This resource, suppliers have nothing better to do with the stocks as the premiums are not high outside, meaning demand is low. Fortune in the ETPs backed by gold have declined by 10.2 tons in a single day to 2620.9 tons while ETF holdings by the SPDR declined by 0.65% on weekly basis to 1342.10 tons. These indicate investment demand is also poor at present. According to the CFTC, although the longs have outpaced shorts by 148,520 contracts, net long position decreased by 1.05% while net short position reduced by a mere 0.40%. This indicates that the shorts are still intact whereas long traders are reducing their bets on price rise. However the above factors are indicating weakness in gold to persist, we need to check the Economic releases which indicate gold may rebound. With immediate support lying at $1638 and then $1630, we might see pullback in prices towards the week end eyeing the ECB meet. Via that time, updates on the US budget ceiling should also be keenly observed.
This week MCX Gold prices should find Support at 30600.00. Trading consistently below 30600.00 would extend the current fall towards the strong support at 30400.00 Major support is at 29000.00-29100.00. Resistance is observed at 31200.00. Trading consistently above 31200.00 would lead towards strong resistance at 31500.00-31600.00. Major resistance is at 32470.00
Silver Weekly View
Week in advance, Silver again seems bearish. Inventories at the COMEX warehouses have increased by 1.17% on weekly basis. Registered silver stocks declined by 3.87% while the eligible silver stocks increased by 3.19%. This point out weak demand for silver. According to the CFTC data, although the speculative long outpaced shorts by 29,188 contracts, total long position fell by 3.35% while total shorts increased by 1.41%. This indicates bearishness is still intact in speculative traders. So, silver should remain weak. On the other hand, as discussed in the Economic releases news on the US budget ceiling and threat of down gradation should be observed. Several such threatening coming from the rating agencies would be supportive for silver. Technically however, silver seems to remain bearish for the week ahead. For this reason, we recommend staying short for t he metal from higher levels.
This week we expect MCX Silver prices to find support around 56500.00. Trading consistently below 56500.00 would extend the current fall towards major support at 55000.00–54000.00. Resistance is now observed at 59500.00. Trading consistently above 59500.00 would lead towards the strong
Resistance at 62000.00. Major resistance at 66100.00
Copper Weekly View:
Copper remained feeble after the minutes of FOMC however better US and Chinese data releases supported prices to gain 2.51% at LME. Higher deliver and rising dollar may continue to act as a negative catalyst for prices in the coming days coupled with highest stockpiling since last 8 months in China. Supplementary, next week markets are likely to eye the developments of ECB and BOE rate decision. Both the European central banks are likely to maintain soft stance and this may continue to support gains in copper.
This week we expect MCX Copper prices to find support around 444.00. Trading consistently below 444.00 would take the prices towards strong support at 438.00 Major supports now seen at 420.00. Resistance is now observed at 458.00. Trading consistently above 458.00 levels would extend the current rally towards strong resistance at 464.00-466.00 Above 466.00 Copper would be trading at fresh highs and can find resistance around 475.00-480.00
Crude Weekly View:
This week we expect oil prices to continue its upside move. Nevertheless, there are few factors which might restrict the gains before weekend. This week is expected to begin with concern on supply bottle neck in Middle East region as U.S. troops arrived in Turkey on last Friday to man Patriot missile defense batteries near the Syrian border. This exploit arrived as the Syria launched Scud missiles at cities near the Turkish border. In response, the U.S., Germany and the Netherlands have deployed Patriot air defense missiles to the border region to examine any Syrian ballistic missiles. Despite the fact that Syria is not a largest oil producer of the World, it is the major strategic point of oil delivery in Middle East region. For this reason, disturbances in the region will fuel oil prices further high. Starting Venezuela President Hugo Chavez is fighting for life which is creating uncertainty of oil industries in the US third largest oil supplier. Secondly, Enterprise Products Partners LP and Enbridge Inc have said on yesterday that Seaway pipeline expansion is going complete in approaching week. U-turn of this pipeline with capacity of delivering 400000 barrels from Cushing to Texas will remove the supply glut in the US major WTI oil delivery centre. Consequently, oil prices are likely to take positive cues from this factor. From economic data front, major releases in the form of lower trade deficit, declining consumer credit may show a positive sign of improving US economy. Increase in major confidence numbers of the Euro-zone are expected to prove supportive for oil prices on expectation of increasing fuel demand. The majority importantly, the ECB and UK are likely to keep the interest rate unchanged and may come up with some ease program in order to support the economy. On the other hand, we have to see the demand front of the largest oil consumer the US. Gasoline stocks rose by 2.5 million barrels last week, capping a five-week build of near 22.5 million barrels. Equally distillates stocks climbed above last 12 weeks high whereas demand in current winter declined by more than 14 percent. Stipulate for the gasoline is down 3 percent from the same period of 2011. Mounting domestic production at 6.9mb/day has pushed down the import by more than 10% in the last week. Enormous fall in distillates demand indicates demand for heating oil has fallen due to warm weather condition. Seeing that per MDA weather service meteorologist, weather is likely to remain warm in the coming week which may not drive higher demand. So, we anticipate further fall or slower pace of rise in refinery utilization whereas stocks may rise higher which will ultimately have negative impact on price. Looking at the above factors we deem oil should continue to remain on upside trend ahead of actual inventory report release in Wednesday night. Nonetheless, ECB interest rate declaration may limit fall in prices. Hence, we put forward remaining on buying side for this week.
This Week MCX Crude prices can find support at 5040.00. Trading consistently below 5040.00 would take the prices towards strong support at 4950.00 Major supports seen at 4800.00. Resistance is now observed at 5200.00. Trading consistently above 5200.00 would extend the current rally towards
Strong resistance at 5270.00 and then finally towards the major resistance at 5500.00.
Mentha Oil Weekly View:
Mentha oil prices are predictable to continue the down trend in this week. Current weak fundamentals amid lack of demand from exporters might create pressure on mentha prices on higher level. According to trade sources, local demand from pharmaceutical sector in small amount would support mentha oil prices to recover during the week. Nevertheless, anticipation of fall in demand due to ban on tobacco products in 19th states in India might keep overall sentiments down. Odisha is having the largest number of gutkha and paan masala consumers. Hence, ban on these products in Odisha might have negative impact on mentha consumption indirectly. Gutkha ban has serious implication for Odisha as the annual health survey (AHS) 2011 found the state having highest percentage with 38% of tobacco chewers among the nine surveyed states. On a daily basis arrivals in UP are hovering in the range of 100-200 drums across the major spot markets. According to trade sources, uncertain movement in mentha prices due to heavy speculation by big players might keep prices volatile during the week.
MCX Weekly Commodity Recommendations:
CRUDE OIL MCX JAN BUY NEAR 5070-5040 SL 4950 TARGET 5150-5210.
GOLD MCX FEB SELL AT 30950-31000 SL 31200 TARGET 30750-30600 {Or} SELL BELOW 30600 SL 30840 TARGET 30450-30300.
SILVER MCX MAR SELL AT 58500-58700 SL TARGET 57400-56800.
COPPER MCX FEB BUY AT 445-447 SL 438 TARGET 457.
MENTHA OIL MCX JAN SELL AT 1425-1430 SL 1465 TARGET 1375-1350.