WEEKLY COMMODITY TECHNICAL REPORT 26 MAY TO 30 MAY 2014

Gold Trades Cautiously Ahead Of Housing Data:

MCX Gold futures are trading slightly weak as global prices are not finding it easy to hold onto the recovery. The local futures sustained heavy selling pressure this week on hopes of rising imports and the inability of.  The US dollar is currently trading at a three month high of around 1.3647 against the Euro and COMEX Gold yet again dropped under $1300 to trade at $1294 per ounce, almost unchanged on the day. MCX Gold is quoting at Rs 27212 per 10 grams, down Rs 29 per 10 grams on the day. The Reserve Bank has eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports. The central bank has allowed Star Trading Houses / Premier Trading Houses (STH/PTH) which are registered as nominated agencies by the Director General of Foreign Trade (DGFT) to import gold under 20:80 scheme. The STH/PTH barred from importing gold since July 2013, would be able to import gold with easing of norms. The STH/PTH should have imported gold prior to the introduction of 20:80 scheme.  The US economic data remains good. The number of people who applied for new unemployment benefits climbed by 28,000 to 326,000 in the week ended May 17, erasing the prior week’s decline, the US Labor Department reported Thursday.

WTI Crude Climbs to Five-Week High on U.S. Supply Drop:

West Texas Intermediate oil climbed to a five-week high after U.S. crude inventories tumbled. Brent approached $111 a barrel. Futures capped a third weekly gain in New York. U.S. crude supplies dropped 7.23 million barrels in the seven days ended May 16, the Energy Information Administration said May 21. Stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell to 23.4 million barrels last week, the least since December 2008. Prices also advanced as violence flared ahead of Ukraine’s May 25 presidential election and unrest continued in Libya. “This has been a pretty solid week for WTI,”. “Prices are up because of the drop of inventories. Cushing supplies are getting close to minimum operating levels.”

WTI for July delivery increased 61 cents, or 0.6 percent, to settle $104.35 a barrel on the New York Mercantile Exchange. It’s the highest close since April 21. Prices rose 2.3 percent this week and 6 percent this year. Brent for July settlement gained 18 cents to end the session at $110.54 a barrel on the London-based ICE Futures Europe exchange. Volume was 28 percent lower than the 100-day average. The European benchmark closed at a $6.19 premium to WTI, the least since April 21.

Copper Rises After China PMI Data:

Copper prices rose after data from China, the world’s largest consumer of the industrial metal, showed the country’s economy may already be getting a boost from last month’s government stimulus.

MCX Copper was showing smart gains, as prices moved above Rs 410 per kg in the intraday. The prices of Copper tested a high of Rs 412 and a low of Rs 408.3 per kg so far. Meanwhile, COMEX Copper tested a high of $ 3.166 per pound, up 2 cents when last checked.

The initial HSBC manufacturing purchasing manager’s index, seen as a key gauge of China’s factory activity, came in at its highest level in five months for May. The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) recovered to 49.7 in May from April’s final reading of 48.1

Stimulus measures unveiled by the government a month ago, such as tax breaks and more spending on railways, are buoying short-term growth for Copper. China accounts for some 40 per cent of the world’s copper imports.

GOLD:

MCX GOLD last week showed sharp downfall as RBI eases some curbs on import of gold and closed below the channel pattern and also took support around physicological level of 27000. Now, if it sustains below its important support level then bears may take it towards the next support level of 26250. On higher side if it maintains above 27800 then next resistance may be seen in the range of 28350-28800. 

STRATEGY:
Better strategy in MCX GOLD is to sell below 27000 for the targets of 26300-26000 with stop loss of 28000.

SILVER:

MCX SILVER showed sideways to bearish movement and took the support of lower band of falling wedge pattern. Now, if the bearish movement continues on lower side then 39900 will act as important support level. On other hand some correction may lead it towards the resistance level of 42000 which is also upper band of falling wedge pattern.

STRATEGY:

Better strategy in MCX SILVER at this point of time is to sell on highs for target of 40000-39000, with stop loss of 43000.

CRUDE-OIL:

MCX Crude oil  last week  showed slightly upward movement and rebounded from its important support i.e 5950 and took resistance of upper band of triangle pattern on daily charts. Now, it needs to sustain above 6150 on closing basis which may lead it towards the resistance of 6250 otherwise it may again drop towards the key support of 5950.

STRATEGY:

Better strategy in MCX CRUDEOIL is to buy above 6150 for the targets of 6300-6350, with stop loss of 5925.

COPPER:

MCX Copper on daily charts showed sideways movement and traded in between channel pattren. Now on higher side if it maintains above 415-425 then breakout of trendline is exepected and may lead upto next resistance level of 433. On other hand if the downward movement continues and sustain below 405 then it may find support in the range of 400-395.

STRATEGY:

Better strategy in MCX COPPER is to buy above 415, with stop loss of 400 for the target of 425.

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