1. CAPITALSTARS FINANCIAL RESEARCH PVT. LTD.
CAPITALSTARS FINANCIAL RESEARCH PVT.LTD.
Bullions Weekly Report
06TH –11TH OCTOBER 2014
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MARKET FUNDAMENTAL NEWS & REPORTS
GOLD Gold eased by $7.00 to trade at 1208.10 as traders prepared for the Nonfarm payroll report. Bloomberg reported that gold declined in London, with the metal almost erasing this year’s gains as the outlook for higher U.S. interest rates amid an improving economy curbs demand for the metal. Gold fell 0.8% this week, cutting its 2014 increase to 0.6%. The Bloomberg Dollar Spot Index, which reached a four-year high this week, rose before a U.S. report that economists say will show employers added the most jobs in three months. Improving U.S. data has added to speculation that the Federal Reserve will raise interest rates next year. Gold was poised for a fourth weekly loss in five, hurt by the strength of the dollar in recent weeks. Markets believe robust US economic data could prompt the US Federal Reserve to raise interest rates sooner and faster than expected. That would hurt gold and other non-interest-bearing assets. Indian traders said increased buying by jewellers and retailers to meet the coming festive and wedding season demand mainly kept precious metals higher. They said a firming global trend on signs of more physical demand amidst escalating tensions in the Middle East also bolstered the sentiment. SILVER
Silver added 6 points to trade at 17.053 but as the day passes, large correction seen in Silver. European equities tumbled the most in 15 months on concerns that an asset-buying program announced by European Central Bank President Mario Draghi won’t be enough to boost inflation and revive the economy. A report yesterday showed euro-area factories expanded at the slowest clip in more than a year. Yet the resilience of the US Dollar has likely weighed on the precious metals. These opposing forces could keep the commodities in line for a period of consolidation. Indian traders said increased buying by jewelers and retailers to
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meet the coming festive and wedding season demand mainly kept precious metals higher. They said a firming global trend on signs of more physical demand amidst escalating tensions in the Middle East also bolstered the sentiment. CRUDE OIL Crude Oil is trading flat at 91.00 even while Brent Oil dipped 7 points to exchange at 93.35 as the global surplus of oil continues to weigh down the commodity. Brent crude dropped to the lowest level in more than two years amid signs that global supplies are outstripping demand. WTI rebounded after falling below $90 for the first time in 17 months. U.S. output will rise next year to the highest since 1970, the Energy Information Administration forecasted. The shale boom has turned the U.S. into the world’s largest producer of oil liquids, reducing its appetite for imports as global demand growth slows. Losses in WTI below $90 would slow U.S. production, Goldman Sachs Group Inc. said yesterday. Russian data showed the country’s output rose to a near post-Soviet era record. Kurdistan’s oil production over the next 15 months may increase by more than Chinese demand growth. Brent hit yet- another 27-month low yesterday but by the end of the day bounced back to about 94. Oil was under pressure after markets interpreted Saudi Arabia’s sharp cut in crude official selling prices as a sign of struggle among OPEC members for keeping their market share in an environment of rising global oil production. NATURAL GAS Natural Gas gained 58 points to trade at 3.99 as traders pay little attention to the EIA inventory report on Thursday evening. The U.S. EIA reported Thursday morning that U.S. natural gas stocks increased by 112 billion cubic feet for the week ending September 26. That compared with an expected increase of about 107 billion cubic feet anticipated by analysts. The five-year average injection for the week is 85 billion cubic feet.
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Stockpiles are about 10.7% below their levels of a year ago and about 11.4% below the five-year average. The rise in U.S. stockpiles is still on course for a record April through October injection. The start of the heating season is still expected to see U.S. stockpiles at around 3.55 trillion cubic feet, the lowest level since 2008 but still adequate. Last year’s injection season ended with 3.8 trillion cubic feet in inventory. Natural gas prices got something of a boost earlier this week on forecasts for cooler weather in the eastern half of the United States, but the drop in temperature is now expected to be lower than originally thought. COPPER Copper gained 5 points to trade at 3.004. Metals remain weak but made little movement in today’s market as traders focus on the US nonfarm payroll report. China remains on holiday. Copper futures dropped below $3 a pound to the cheapest in more than five months as signs of deepening economic malaise in Europe dimmed demand prospects. Base metals prices remained under pressure yesterday and fell by about 0.8% on average. In recent weeks, fears about China’s demand and a significant appreciation of the US dollar have weighed on metals prices. Although copper edges slightly higher today (after hitting a five-month low yesterday), payrolls report for September which is going to be released in the afternoon may rather contribute to a downward pressure on the metal via its impact on US dollar.
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TECHNICAL VIEW
GOLD DECEMBER MCX WEEKLY PIVOT POINT
WEEKLY OUTLOOK
TREND
BEARISH R2 27580
R1
27300 S1 26300
S2
26000 STRATEGY SELL ON RISE
GOLD WEEKLY
SCRIPT
R2
R1
PP
S1
S2 GOLD 27399 26967 26736 26304 26073
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CRUDE OIL OCTOBER MCX WEEKLY PIVOT POINT
WEEKLY OUTLOOK
TREND
BEARISH R2 5900
R1
5760 S1 5510
S2
5430 STRATEGY SELL ON RISE
CRUDE OIL WEEKLY
SCRIPT
R2
R1
PP
S1
S2 CRUDE OIL 6005 5782 5663 5440 5321
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NATURAL GAS OCTOBER MCX WEEKLY PIVOT POINT
WEEKLY OUTLOOK
TREND
BULLISH R2 263
R1
258 S1 243
S2
238 STRATEGY BUY ON DIPS
NATURAL GAS WEEKLY
SCRIPT
R2
R1
PP
S1
S2 NATURAL GAS 266 258 251 243 236
11. CAPITALSTARS FINANCIAL RESEARCH PVT. LTD.
COPPER NOVEMBER MCX WEEKLY PIVOT POINT
WEEKLY OUTLOOK
TREND
BEARISH R2 424
R1
421 S1 410
S2
405 STRATEGY SELL ON RISE
COPPER WEEKLY
SCRIPT
R2
R1
PP
S1
S2 COPPER 426 420 416 409 405
12. CAPITALSTARS FINANCIAL RESEARCH PVT. LTD.
COMMODITY PICK OF THE WEEK: COPPER MCX COPPER NOV as seen in the weekly chart above opened at 416.50 levels with a gap down trend and during this period prices made weekly low of 411.75 Levels. During this week, Copper couldn’t sustained on highs & bounces back & made low of 411.75 levels. Price finally closed 0.68% lower at 413.45 levels. Now, there are chances of further downward movement in it both technically & fundamentally. For the next week, we expect Copper Nov prices to find support in the range of 412-410 levels. Trading consistently below 409 levels would lead towards the strong support at 405 levels and then finally towards the major support at 398-399 levels. Resistance is now observed in the range of 419-421 levels. Trading consistently above 422 levels would lead towards the strong resistance at 424 levels, and then finally towards the Major resistance at 427-428 levels. WEEKLY RECOMMENDATION: SELL COPPER NOV MCX NEAR 416-418 LEVELS FOR TARGET OF 410/405 WITH SL OF 426 LEVELS.
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COMMODITY PICK OF THE WEEK: CRUDE OIL MCX CRUDE OIL OCTOBER as seen in the weekly chart above opened at 5764 levels & made a high of 5885 levels but prices not sustained at the resistance levels & bounce back to weekly low of 5543 levels. The prices finally closed 3.72% lower at 5560 levels on weekly basis. For the next week, there are further strong trend of downward movement technically. For the next week, we expect Crude Oil Oct prices to find support in the range of 5510- 5490 levels. Trading consistently below this levels would lead towards the strong support at 5460 levels and then finally towards the major support at 5430 levels. Resistance is now observed in the range of 5615-5630 levels. Trading consistently above 5650 levels would lead towards the strong resistance at 5800 levels & finally towards major resistance at 5860-5875 levels.
WEEKLY RECOMMENDATION: SELL CRUDE OIL OCTOBER MCX NEAR 5600 FOR TARGET OF 5485/5430 WITH SL OF 5730 LEVELS.
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