Gold and Silver Weekly Outlook and Commodity Tips

Information about Gold and Silver Weekly Outlook and Commodity Tips

Published on April 19, 2014

Author: speak2earth

Source: authorstream.com

Content

PowerPoint Presentation: G o ld and Si l ver W eek l y Ou tlo ok a n d C omm o d ity T i p s G old Comex J u n e f u tu r e is se e n t r a d i n g at $ 1 3 0 0, d o w n b y 1.4 0% f r om i t s p r evi o us w ee k ’s c lose. Li k ewi se, in th e M CX Gold Comm o di t y pl at fo rm t h e same c o n tract t ra d ed do w n b y 0.8 0% at R s . 28, 5 4 4 . T h ere is a sligh t d ivergen ce b e t w e e n C O MEX a nd MCX gold p rices due to c u r r e n cy d e p r ecia ti o n. I ndi a n r u p ee sp o t p rices e n ded th e w eek at 6 0.3 3 do w n b y 0. 43% from i t s p revio u s c lose. O v erall, th e go l d c omm o di t y has b een i n t o a b eari s h leg fo r t h e pa s t sever a l mon t hs a nd li kely t h at t he t re n d may co n t i nu e in th e near te r m. H o w ever, in be t w e e n w e saw a good a mo u n t of p rice r ecovery d ue to co n t i n ued g e o - p oli t i c al t e nsion b e t w een Russia a n d U k rai n e. N on e t h eless, t h e o t h er f u n d am e n tal f actors are s till s u gges t i n g w ea k n ess in t he c ommodi t y. Fro m t he i nvestment f r o n t, t h e S PDR gold tr u s ts t h e large s t ETF b ac k ed b y Go l d has decli n e d i ts ho l di n gs f r o m 8 04 t ons to 7 98 t o ns i ndi c a t i n g i n ve s tment d em a nd is s t i ll low. Mean w hi l e, p o o r Chinese eco n o my is driv i ng ph ys i c al d em a nd l o w er also pull i n g t he c ommodi t y lower. We b eli e ve as lo n g as Ch i na c on ti n u es t o rema i n un d er c on ce r n t h e go l d d eman d may r emain m u ted a n d t h at sh o uld k e e p th e p rices l o w er. T he o t h er mar k e t d y namics- risi n g USD i nd ex a nd fall i n g e u r o c u r r e n cy is also drivi n g go l d lower .We b eli e ve t h e simil a r k i n d of s ce n a rio may b e n o t i ced in t h e n ear f u tu r e. F rom t h e i n ve n tory f r o n t, at C O MEX t h e s to c k s h ave ris e n in t h e r ece n t past su ggest i n g th a t t he p h ys i c al deman d is low e r a n d as l o n g as sto c k s c on ti n u es to tra d e hi g h e r w e c ould s e e gold p ri c es ma n agi n g to tr a d e b e low $ 1 3 0 0 mar k . Th e eq u i ty mar k et p e r fo r m i n g in gre e n e s pecially th e US i n di c es is s u gg e sti n g th a t th e glo b al investors’ are relu c ta n t i n b u y i n g t he go l d c o m m odi t y as an i n ve s tment a sse t. Loo k i n g a t t he a bo ve s c e n ario w e beli e v e th a t g old co mmod i ty m ay r e m ain l o w er i n t he n ear term. T h e risk f actors t h at are li kely to ke ep th e c ommodi t y a w ay f rom h u ge f a ll are t he slig h t im p rovem e n t in t h e P P I / CPI n um b e rs o f US a n d E u rop e. Also , t h e 10 year t r easu ry y i e l d i s ma n agi n g a t 2.6 4% i n d i c a ti n g t h at t h e lower y i eld co uld bri n g in sl i gh t d e ma n d fo r t he c ommodi t ies. Fo r t h e n e xt w eek w e hold a b e a r i sh view o n g old w hile w e also bel ieve th a t b y en d of n e x t w eek o r early n ext t here m ay b e a g o od bargain b uy i n g i n go l d f r o m l o w er levels Gold MCX J u ne Com mo di t y f u tu r e p rices saw v ola t ile mo ve m e n ts i n t he last w ee k , m ovin g in th e r a n ge o f Rs 2 8 2 0 0 - 2 8 9 8 6. As of 1 7 A p ril, 2 0 1 4 p r i c es are tr a di n g a t Rs 2 8 5 2 6, d o w n b y 0.79% fr o m t he previ o us w ee k ’s c losi n g. Te c h ni c al i n di c a t ors li k e t he w ee k ly expon e nti a l movin g ave r ages ( 8 , 13 & 2 1 ) a nd w ee k ly rel a tive st ren g th i n d ex ( 1 4 ) are b o th s u ppo r tive of t he do w nsid e mo ve m e nts. F o r sh o rt term t r a d ers, w e su ggest sell i n g at t h e h i gh er le v els. PowerPoint Presentation: Sell Silver M c x May n ear 4 2 7 8 0 sl 4 3 8 50 T g t 4 1 60 0 - 4 1 0 0 0 Gold W e e k ly T re n d : Si d ew ays Up S u p p o rt at 2 8 1 0 0 - 2 7 4 0 0 Resi sta n ce a t 2 9 1 0 0- 2 9 5 00 Si lv e r fol l o w ed th e b ro a d er tre n d in t h e c o m pl e x a n d as o f T hu r s d ay e v e n i n g sess i on ( IST) w e are seei n g May mo n th c on tra c t at Comex is st a n di n g at $ 1 9. 65 p er o u n ce levels, lower b y 1.6 % for t h e w ee k . While w e had a se l li n g view in th e w h i tish p re c io u s me tal as w ell, w e also su ggest e d a Ra t io s t ra t e gy w h ere in w e r ecom m e n d e d buy i n g G old a n d selli n g silver w i t h a n a n tic i p a ti o n t h a t silver w ould u n d e r p e r fo rm g o ld a n d event u ally i n c reasi ng th e ra t i o. T he sa m e held c o rre c t w h ere i n p a r ti c ularly dur i n g th e mi d dle sessi o ns o f t h e w e ek , gol d / silver ra tio fo r Comex active co n tra c t t o u c h ed n e ar 6 7 levels. Ou r n eg a tive st a n ce on t h e c omm o di t y w as also build i n b y th e f act th a t w e exp ected co n t i nu e d dema n d p ressure c omi n g from Ch i nese mar k e t s , w orl d ’s large s t c ons u m er of t h e c omm o dity alon g w i t h ex p ect e d i n c rease in t h e U S DX. W h i l e US d ollar m od e r a t ely c u t losses t his w ee k , eq u i ties across t h e US a nd E u rope p e r fo r med w e ll a n d mai n ly US i n di c es flied high. N ega tivi s m for t h e se c tor w as su p po r ted b y pos i tive set of ec o nomic c u es f r o m th e US mai n ly o n ma n u f act u ri n g rel a t e d s ector. W hile b ro a d er f a c tors fo r th e c o m m od it y h ave no t c h a n g e d m u c h , w e a r e ho l di n g ou r nega t ive bi a s i n t o c o m modi t y f o r t h e n e x t w e e k too. As also st a t e d in p revio u s w ee k , u n d erp e r fo rm a n ce in silver in a w eek w h en b ase m e tals re c or d ed smart r e tu r ns tells a bo u t th e i n h er e n t w ea k n ess in th e c omm o di t y. In t he c u rr e n t w ee k , w e saw d ece nt i n crease in th e m e tals co m p lex, d e s pi t e w hi c h silver saw higher fall as e qu a ted to gol d . T h e b e n chmark L M EX i n d ex f o r L M E t ra d e d b ase m e tals m a n ag e d to ho l d ne a r la s t w ee k ’s high mark a f t er ar o und 2.5% u pti c k i n imme d ia t ely p r ece d i ng w ee k . As i n vestm e n t rel a ted d e m a n d n o t b ei n g a ble to p rovide a n y s u p po rt t o th e c omm o di t y a n d w ea k n ess in Go l d a n tic i p a t e d c o n ti n ui n g, w e feel silver too w ould co n ti n u e to tr a d e o n a w ea k er no t e a nd t hus s u ggest s elli n g t he c o m m odi t y on p ull b ac k s. I n - f a c t w e are also ho l di ng our bu l lish view o n th e g ol d / silver r a tio al b e it t h e p ace o f i n crease in r a tio mig h t n o t b e as high as b e e n th e case i n p rev i ous few w ee k s Silver’s MCX May Com m odi t y fu t u re p rices saw a do w nsid e fall i n t h e last w ee k . As of 17 A p ri l , 20 14 p rices are t ra d i n g at Rs 4 2 4 0 8, d o w n by 1.80% from t he p revio u s w ee k ’s c lose. Pri c es are w i t nessi n g a st r o n g resi s ta n ce a t Rs 4 3 8 4 0, w hi c h is exp ec t ed to ho l d t h e do w nsid e view fo r t he w eek a h ead. A b reak b el o w Rs 4 1 5 0 0 c ou l d co nf irm f u r t h er w ea k n ess in th e n e ar term. F o r short t e rm tra d e r s, we s u ggest s e lli n g a t t he hi g h er level s . Silver We e k ly T r e n d : S i dewa y s S u p p o rt at 4 2 3 0 0 - 4 1 2 0 0 Resi sta n ce a t 4 4 0 0 0- 4 5 5 00 Co mm o dity T ips Sell Gold M c x J un e n e ar 2 8 6 5 0 sl 2 8 9 70 T g t 2 8 40 0 - 2 8 1 0 0

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