- The gold price surged following the Brexit referendum announcement, rising 24% for the year. The pound fell to a 31-year low and equity markets plummeted. - Strong inflows are expected to continue into gold due to prolonged Brexit uncertainty. Trading volume on the Shanghai Gold Exchange spiked to 346 tons compared to the average of 100 tons. - Central banks like the Bank of England stand ready to take action, which could include pushing interest rates further into negative territory, boosting gold.

1. News and Developments
The gold price surged to US$1,315.50/oz on June
24, following the announcement of the referendum.
Gold was up by 24 percent, higher since the
beginning of the year. The pound sterling fell to a
31-year low and world equity markets plummeted.
With Britain voting to exit the EU, we expect to see
strong and sustained inflows into the gold market
driven by the staggering level of protracted
uncertainty that investors now face. There has
already been a sharp uptick in activity on the
Shanghai Gold Exchange. Trading volume spiked,
reaching 346t compared to a daily average of close
to 100t since the start of the year.
The Bank of England has said that it stands ready to take whatever action is necessary, a mantra that is likely to be
repeated by other central banks. In practice, this could mean interest rates move further into negative territory in parts
of the world, another positive for gold.
Technical Outlook
On weekly chart, the COMEX Gold prices have been trading in “Rising Channel” pattern from past 7 months and price
has faced strong resistance of its upper band of channel pattern at $1379 levels. On weekly chart, COMEX Gold prices
have been facing resistance of falling trend line at $1381 levels. On daily chart, COMEX Gold price has formed “Shooting
Star” candle stick pattern which is bearish pattern. Moreover, on weekly time frame, COMEX Gold price has faced
resistance at $1381 level which is 38.20% Fibonacci Retracement levels of its previous bearish move from $1921.20 to
$1047.70 levels. So any rise in MCX Gold upto Rs.31800 can be used as selling opportunity for the target of Rs.29800
levels with the Stop loss of Rs.32500 levels. On the other hand, MCX Gold momentum indicator RSI has shown “Negative
Divergence” on a weekly chart, which suggests further weakness in the prices. Overall, we hold our bearish view in
Gold for the next three months.
12th
July, 2016
SEBI Registered - Research Analyst Equities I Commodities I Currencies I Mutual Funds
GOLD
Commodity Insight

2. News and Developments
Planting of crops has jumped 88 per cent in the past
week in step with the monsoon's surge since the end of
June, raising hopes of a much higher production and
moderate prices of pulses and rice. Water level in
reservoirs also increased, which is good for post-
monsoon irrigation and hydropower generation. Planting
of pulses jumped 131 per cent in a week, and is 26 per
cent higher than last year even though this year's
monsoon came late and was scanty till the middle of last
month.
Monsoon rainfall last week was 35% above what is touted to be normal, helping kharif sowing to exceed last year’s level
in case of rice, pulses and sugarcane, although the overall sowing level was still 6% lower than a year ago, reports Sandip
Das in New Delhi. Rains during the current season, which remained below normal until over a week ago, turned slightly
above normal: As on July 7, the rains were 1% above the benchmark long-period average. This has also improved water
levels in 91 large reservoirs, although the storage continues to be significantly low than this time last year. Analysts say
that the sowing of kharif crops like paddy, pulses and oilseeds have picked up pace because of widespread rainfall.
According to ministry of agriculture data released on Friday, the sowing was lagging by 23% last week.
Technical Outlook
NCDEX Guarseed prices have given a breakout of its “Falling Wedge” Rs.3200 levels. Breakout can be seen with
bolstering volumes which indicates strong upside momentum in the prices. The price has taken support of its rising
trend line at Rs.3120 levels on daily chart. It has major support at Rs.3000 levels which is also a 100 DEMA. Moreover,
price has been trading above its 100 DEMA, which indicates short to medium term trend remains positive. As the NCDEX
Guarseed looks strong on charts so every dip in prices till Rs. 3290 should be used as buying opportunity with a stop loss
to be kept around Rs.3100 for the upside target of Rs.3700. Overall, we hold our bullish view in Guarseed for next
three months.
GUAR SEED
12th
July, 2016
SEBI Registered - Research Analyst Equities I Commodities I Currencies I Mutual Funds
Commodity Insight

3. SPDR Gold ETF Holdings
Crop Calendar
Commodity Country January February March April May June July August September October November December
Guarseed India
Sowing
Growth
Harvesting/Arrivals
Commodity LTP WoW (%) MoM (%) Open Interest
(Weekly)
Spot Gold ($/oz) 1355 1.86 8.76 --
Spot Silver ($/oz) 20.37 2.63 17.01 --
MCX Gold (Rs./10
gms)
31532 2.58 8.99 -479
MCX Silver (Rs./kg) 47978 4.23 13.19 8252
NCDEX Guarseed
(Rs./quintal)
3481 4.32 -2.25 -22160
SEBI Registered - Research Analyst Equities I Commodities I Currencies I Mutual Funds
Commodity Insight12th
July, 2016
Source: Bloomberg

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Commodity Insight12th
July, 2016
SEBI Registered - Research Analyst Equities I Commodities I Currencies I Mutual Funds
Anish Vyas
Digitally signed by Anish Vyas
DN: cn=Anish Vyas, o=Choice Merchandise
Broking Pvt. Ltd, ou=Sr. Research Associate,
email=anish.vyas@choiceindia.com, c=IN
Date: 2016.07.12 13:50:54 +05'30'