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 week’s 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 780+tons 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 (11:30 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
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 (11:30 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