WEEKLY COMMODITY TECHNICAL REPORT 03 MARCH TO 07 MARCH 2014
PRECIOUS-Gold heads for biggest monthly gain since July:
Gold was little changed on Friday but was on track for its biggest monthly gain since July after investors and speculators chased prices higher on concerns about the pace of the U.S. economy and unrest in Ukraine. Recent gains, though, may be hard to sustain in the absence of strong physical buying. Gold has gained 7 percent in February, its biggest monthly rise since the 7.2 percent added in July. The physical market in Hong Kong is still very slow and no fresh buying interest. Sentiment in the market is neutral from here. Premiums for gold bars in Hong Kong dipped to $1 an ounce to the spot London prices from as high as $1.70 last week, which reflected a slowdown in demand from China.Weakening differentials between 99.99 percent purity gold on the Shanghai Gold Exchange and cash gold discouraged imports. U.S. gold was also little changed at $1,331.40 an ounce. Unusually harsh winter weather appears to be behind recent signs of weakness in the U.S. economy, Federal Reserve Chair Janet Yellen said on Thursday, suggesting the central bank was poised to press forward in ratcheting back its stimulus. The Fed’s stimulus programme has pushed money into riskier assets such as commodities and stoked inflation fears. The physical market was equally quiet in Singapore, a centre for bullion trading in Southeast Asia
US oil rises on talk of reduced supply from Bakken:
US oil rose on Friday on market talk of decreased supply from the Bakken shale in North Dakota. Crude oil loadings at a dozen major North Dakota rail terminals fell by more than 200,000 barrels on average in the past two days, data from industry intelligence provider Gens cape showed on Friday. The US Federal Railroad Administration said that any talk of a shutdown at the Bakken oilfield terminals was “a rumor.” However, market chatter about a rail terminal shutdown in the Bakken drove US oil up 34 cents in one minute at 10:35 a.m. EST (1535 GMT). US crude oil held most of the gains, supported by a weaker US dollar and rising equities, and was last trading 31 cents higher at $102.71 at 12:57 p.m. EST. Brent crude rose 24 cents to $109.20 a barrel. Tension in Ukraine and lower estimates for US gross domestic product capped gains. The US Commerce Department reported Friday that GDP expanded at a 2.4 per cent annual rate in the fourth quarter, down sharply from the 3.2 per cent pace reported last month and shy of analyst expectations. The situation appeared to be deteriorating in Ukraine’s Crimea region near the border with Russia on Friday after armed men that the Ukraine government described as Moscow’s forces took control of two airports on Friday, dampening overall risk appetite.
Base metals vulnerable to short-covering rallies:
Short positions have increased sharply in Copper, nickel and Zinc which makes it vulnerable to short covering rallies should there be upside data surprises.Time spreads across the metals have continued to tighten alongside the build in short positions. The LME copper cash to three-month spread is trading at a $43/tn backwardation with two sizeable copper short positions in the March contract. It will be interesting to see whether these positions are physically delivered against. Buying Nickel on dips is advised although analysts are supported on lack of movement in prices which could be due to market complacency with regard to the Indonesian ore export ban.
Now that the ban is in place and raw material is no longer leaving Indonesian shores, its effect is slowly beginning to be felt. Physical market indicators are starting to show a moderate increase in NPI and Chinese port ore stock prices, while in copper the lack of concentrate exports is contributing to the decline in spot treatment and refining charges. After hitting a high of $130/ton and 13 pounds/lb, recent bids for clean concentrate have been as low as $80/ton and 8 pounds/lb.
MCX GOLD Technical Trend :
MCX GOLD last week showed sideways to bullish movement, trades around 38.2% retracement and closed around it. Now, if it sustains at higher levels and trades above 30400 then bulls may lead it towards the resistance level of 30800. On other hand 29750 will act as important support below which bearishness may drag it upto the level of lower band of channel pattern at around 29200.
Better strategy in MCX GOLD is to sell below 29700 for the targets of 29400-29000 with stop loss of 30420.
SILVER Technical Trend :
MCX SILVER last week showed bearish movement, closed below 23.6% retracement and breached the level of 46932 to fill the gap on daily charts. Now, if it breaks the support level of 46200 then next support range will be seen around 45850-45250. On higher side if maintains above 47200 then may lead it towards the resistance range of 48300-49100.
Better strategy in MCX SILVER at this point of time is to sell below 46100 for target of 45300, with stop loss of 47200.
MCX CRUDE OIL Technical Trend :
Crude oil last week consolidated in range of 6275-6425, able to sustain above its important support of 6275 and also moved in between upward channel pattern. Now, if it gives closing above 6460 then only positive movement is expected upto the resistance level of 6580. On other hand sustaining below 6270 may drop it upto 6150.
Better strategy in MCX CRUDEOIL is to sell below 6270 for the target of 6150, with stop loss of 6470.
MCX COPPER Technical Trend :
MCX Copper on daily charts showed brearish movement, able to close below trendline and also at around 50% retracement. Now, if it breaks and sustain below the support level of 439 then it may drag towards its next support of 429. On higher side closing above 450 is essential for further bullish movements which may lead it towards 38.2% retracement i.e. 456.
Better strategy in MCX COPPER is to sell below 439, with stop loss of 450 for the target of 429.
Source : Trifid Research