Bullion Weekly Technical Advice of Commodity Advisory Services

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Bullion Weekly Technical Advice of Commodity
Advisory Services
Gold Commodity in the last week and as of Friday
advice of Commodity Advisory Services the most
active gold future contract for June delivery at
COMEX is seen trading at 1291 no change from its
previous week while in Indian market the prices
have reached to Rs. 28000/10 grams down by
1.50. At the global front the participation
was low as mixed bag full of data were
released across the globe while the 10 year T
bills Yield stood at 2.50 down by 3.70 from its
previous week. We may also believe due to
fall in the US yield the fall in gold
prices were restricted while locally gold prices
corrected down due to Indian rupee appreciation.
During the week Indian rupee appreciated over
2 from its previous weeks close while
the Indian government hiked the import
tariff price from 422 to 424. Beside,
the Indian rupee appreciation new government
forming in India is giving hope that soon in near
future the gold import duty which is now at 10
may decline by at least 2. In this regard we may
see gold prices trading lower at the local market
while the fall in the global market may remain
less as long as the Yield in the US stays lower.
From the demand front, the investment demand
stays muted at 780tons at the SPDR gold
trust while physical demand from China and
India continues to be lower. Another factor which
may keep gold prices lower is the declining
jobless claims number in the US which is
currently at 7 years low. Also, Russia-Ukraine
tension is not much of talked these days so
possibly the commodity gold may remain undertone
in the next week. Overall, we wish to take
more bearish stance on gold at the local
market while global gold might decline but the
pace could be lower News CME cut the amount
of collateral required to trade the
benchmark gold and silver futures contracts
during the night. CME, which possess the
Comex division of the New York Mercantile
Exchange, trimmed gold margins by 7.7 effective
close of trading Friday. Tentative investors in
the benchmark 100-troy ounce gold contract
can now deposit 6,600 to open a position
and maintain 6,000 of that to keep that location
during the night. That's down from the preceding
initial fringe of 7,150 and maintenance
margin of 6,500. The initial and
maintenance margin requirements for producers or
consumers of gold have been reduced to 6,000
from 6,500. Trading margins on the
yardstick 5,000-ounce silver futures contract
be slash 8.3 percent. Gold June MCX futures
prices fell sharply in the last week. As of 16
May, 2014 prices are closing at 28089, down by
-1.5 from the previous week close (1130 PM
IST). Prices are expected to continue the same
trend for the week ahead. Initially we might see
a higher recovery before resuming its
downtrend. A stiff resistance is seen at
28395 (23.6 retracement of the range
2
30421-27770), which is expected to hold the
downside view. Downside potential is seen until
27770 levels (previous low). For short term
traders we suggest selling at higher levels Gold
Mcx Trading Levels for the Week Trend
Down Support at 27700-27200 Resistance at
28500-28900 Silver Commodity we had a
selling bias in the commodity along with
gold last week amidst weaker set of demand
cues for the Bullion complex globally. As of the
latest quote on Friday, prices for active July
contract at Comex are trading higher by 1.35 to
19.38 per ounce though in the local markets we
saw good decline in the range of 1 led by
healthy appreciation in the commodity past week.
Better performance during the international
markets was probably was prompted by better
performance in the industrial metals front
wherein almost all metals added weight except
Nickel in the LME. While there were good amount
of ups and down during the past week in the
commodity, fresh round of tensions in
earlier half of the week in Ukraine region
pushed bullion i.e. both gold and silver higher
as a safe heaven complex against regional
uncertainty. Overall though as we keep our Gold
view on the weaker side in the next week, our
broader factors for silver too point towards
extended weakness in the commodity in the next
week. As also stated above, ETF and physical
consumption continues to lack fresh boost. The
Ishare investment holding for silver
commodity has been stable for last two
weeks with no change in institutional holdings.
While the risk factor against our weak bias in
the commodity is extended rise in base metals
pack, we feel local MCX Silver prices
would continue to be weighed by ongoing
appreciation in the INR. We advice traders
to initiate shorts in the commodity during
the coming week, particularly at the domestic
front on pullbacks. Silver July MCX futures
prices declined in the last week by extending the
previous trend. As of 16 May, 2014 prices are
closes at 40894, down by -1.2 from the previous
week close (1130 PM IST). Prices have
breached the support at 41200 (previous
low) and currently hovering below the same is
signaling further downside potential. Next strong
support is seen at 40500 levels. A significant
break below 40500 could lead the drop to
extend towards 40200-39800 levels. We might see
a higher correction before resuming its
downtrend. For short term traders we suggest
selling at higher levels Silver Mcx Trading
Levels for the Week Trend Down Support at
40000-39200 Resistance at 41800-42800 Weekly
Tips of Commodity Advisory Services Gold Mcx June
Sell on Rise near 28250-28300 sl 28520 Tgt
27920-27700 Silver Mcx July Sell On Rise near
41200-41350 sl 42000 Tgt 40500-39800