Gold:
It is apparent that the year 2012 remained less profitable for gold; especially the second half of the year erased much of the gain that it made earlier. Nevertheless, it’s time to look ahead for this week which falls into the year 2013 with lots of anticipations over the US fiscal cliff. The meaningful progress in the budget talk will certainly be the key focus for the financial markets before the nonfarm payroll on Jan 4 takes the centre stage. Gold inventories at the COMEX warehouses increased by 1.31% from the prior month and it is on a continued increasing mode since August 2012. So, weak spot demand may fuel prices to decline. Speculative long position in gold has outpaced the shorts by 150,097 contracts but the net long fell by 4.87% last week. Net long positions are falling since past four weeks which would have been another reason for gold’s continued decline. The US nonfarm payrolls may continue to add 145-150K jobs in December. After October 29th, the Sandy impact would have compelled laborers to stay out of the force but gradually they are coming back to the force. This may raise the unemployment rate as Employers took 1,759 mass layoff actions in November involving 173,558 workers as measured by new filings for unemployment insurance benefits during the month, the U.S. Bureau of Labor Statistics reported on December 21st. So, a moderate pace of jobs addition could be seen with rising unemployment rate. This would be supportive for gold.
This Week MCX Gold prices to find Support at 30,460.00–30,430.00. Trading consistently below 30,420.00 would extend the current fall initially towards the strong support at 30,150.00 and then finally towards the major support is at 29,775.00. Resistance is observed in the range of 30,860.00-30,900.00. Trading consistently above 30,910.00 would lead towards the strong resistance at 31,048.00, and then finally towards the Major resistance is at 31,510.00.
Silver:
Since we enter into the 2013, market angst is staying high on anticipation of the US fiscal cliff. December 30 would the key to watch for any concrete deal on the US budget. A successful deal would be fatal for the metal while any stalled effort should be supportive for silver. Silver inventories at the COMEX warehouses dropped by 5-day average of 0.4% while on monthly basis also inventories declined by 0.15%, indicating slightly improved spot activities. Speculative long positions have outnumbered the shorts by 30,643 contracts but the net long position declined by 15% from the prior week. This may be having a negative impact on prices.
This Week MCX Silver prices to find support in the range of 57,100.00-57,050.00. Trading consistently below 57,040.00 would extend the current fall initially towards the strong support at 56,550.00 levels and then finally towards the major support is at 55,540.00. Resistance is now observed in the range of 58,100.00-58,200.00. Trading consistently above 58,200.00 would lead towards the strong resistance at 58,990.00 and then finally towards the major Resistance at 59,480.00.
Copper:
The CFTC data released last Tuesday indicated fall in both shorts and long positions. The non-commercial sector remained entirely opposite to commercials as longs declined drastically while shorts increased. However, commercial longs increased eying the concerns of future supply disruptions from Escondida copper mine in Chile. Similar to non-commercial longs, commercial shorts too declined, however market is likely to eye the developments of the US fiscal cliff negotiations and non-farm payrolls. Overall, for this week, longs have declined more than shorts and hence weakness might be witnessed initially. Further, concerns of higher taxes and lower participation are likely to continue downside in prices and hence we should continue to remain bearish in this week.
MCX Copper prices to find support in the range of 435.50-434.40 and then strong support are seen at 431.30-430. Trading consistently below 430.00 would trigger sharp correction initially towards 426, and Then finally towards the major support at 422.00. Resistance is now observed in the range of 441.00-442.00. Trading consistently above 442.50 would lead towards the strong resistance at 445.60 and then finally towards the major resistance at 449.00.
Crude Oil:
This week we may notice oil prices to come under pressure. However, there are few factors which might restrict the fall for some time. This week will start with consequences of fiscal cliff talk which is to be held on 30th December. Both republicans and democrats are likely to reach a conclusion before 1st January in order to avert the automatic tax rise and spending cuts. The US Energy sector is also included in spending cut. If the amendment goes for increasing spending cuts in Energy sector and tax rises for major business sectors, then concern of lower fuel consumption may come up ahead of actual implication of the bill. Therefore we expect concern on fiscal cliff talk will act as a bearish driver for the oil prices in beginning of the week. Thereafter New Year holiday celebration in beginning of the year may not bring more participation. From economic data front, improvement in manufacturing data of major nations may limit fall in oil prices, ahead of the US monthly payrolls numbers. From fundamental front, gasoline stocks rose by 3.8 million barrels last week, capping a five-week build of near 23 million barrels. Likewise distillates stocks climbed above last 11 weeks high whereas demand in current winter declined by more than 2 percent. Demand for the gasoline is down 2.8 percent from the same period of 2011. As per MDA weather service meteorologist, weather is likely to remain warm in the coming week which may not drive higher demand. So, we expect further fall in refinery utilization whereas stocks may rise higher which will ultimately have negative impact on price. Another important point that everyone would be keeping in mind this week is Iran’s naval force conducting a six days military exercise in the Strait of Hormuz starting from 28th December, a choke point for 20% of the world’s traded oil. Any development during next four days could be a threat to oil related traders’ as oil prices are usually contagious to such geopolitical activities.
MCX Crude prices to find Support at 4972.00-4962.00. Trading consistently below 4960.00 would trigger correction initially towards the strong support at 4885.00 and then finally towards the major support at 4815.00. Where ad Resistance is now observed in the range of 5065.00-5075.00. Trading consistently above 5076.00 would lead towards the strong resistance at 5144.00 and then finally towards the Major resistance at 5200.00.
MCX Weekly Technical Recommendations:
GOLD MCX FEB SELL @ 30840-30860 SL 31075 TARGET 30560-30450
SILVER MCX MARCH SELL @ 57900-58000 SL 58650 TARGET 57100-56800
COPPER MCX FEB SELL @ 441-442 SL 443.60 TARGET 436-432
CRUDE OIL MCX JAN BUY AT 4975-4965 SL 4900 TARGET 5060-5125 {OR} SELL AT 5080 SL 5150 TGT 4900