Reasons Why Gold Seeing Downhill View of Commodity Advisory Services
Gold Mcx Commodity Advisory view fell that precious market fell over 5% in the last week of October while it is down in the whole month by 3.30%. We however believe the trend to remain integral Key reasons for declining gold prices: 1) Robust economic data from the US especially the improved GDP and rising USD index helped gold commodity to trade down 2) Federal Reserve in the US earlier in the week ended bond buying programme 3) Losses overstated after the Bank of Japan announced stimulus programme and the ECB may soon do the same 4) Technical levels break down below $1180 was another trigger for gold to trade down 5) Investment demand continuously falling and the SPDR Gold holdings have come down below 745 tons 6) The lower global inflation especially in the euro-zone are pulling the safe haven assets lower so gold is also trading down 7) China sent investigators to probe a seven-fold surge in September’s Bullion exports, raising apprehension that insists in the world’s largest purchaser may turn down. India is the second biggest user; imports are set to plummet in October after a more than four-fold jump last month. 8) Premiums on the Shanghai Gold Exchange - the main platform for physical trades in the country slipped to less an a $1an ounce, infrequently dropping to a discount against the global benchmarked rate The view in the next week: We are not seeing any turnaround in the prices soon in the near future meaning the trend would continue to remain bearish. The investment demand is also not likely to make a spin off over the weekend so possibly the demand on gold may stay fragile in the short term. Also, the other global factors are likely to keep the metal lower, the ECB meeting scheduled in the next week would be crucial to watch out. Although in the meeting the announcement of economic stimulus may be declared or some sort of other announcements could be made which may possibly pull euro currency lower against its major counter parts by which gold may also remain down. Besides, the Effect of JPY weakening against the USD is likely to prolong for few days in the next week which may have its adverse impact on the gold bullion prices. We could have had suggested some sort of value buying in gold if the physical demand had been better in the recent past. Regrettably physical demand from Asia is very negligible so possibly unlikely that the demand for gold would abruptly prop up in the next week. Also, every investor globally would have understood the gold’s price behavior and factors affecting the trend. Hence, we are not seeing any fresh buying in gold until before it hit $1150 marks in the global market while locally Rs. 26,500 is likely in the near term. So, overall we hold a bearish outlook on Gold in the next week. The risk to our sell view would be by any means if USD makes a little price correction then gold prices might rebound however,
those levels would b ideal to make fresh short positions in the market. For physical buyer we may suggest to wait for some more time or a deferred approach should be developed in buying the precious metal Gold Dec MCX futures prices traded downside in the last week. As of 31 October, 2014 prices are trading at 26135, down by -4.5% from the prior week close. In the seven days chart prices have breached the support at 26471 and hovering below the same signals further downside potential. For short term traders we suggest selling at higher levels Gold Commodity Weekly Advisory Outlook: Trend: Down Major Resistance on Upside at 26550-2700 Major Support on Downside at 25600-25200 Silver Mcx Commodity Advisory story is simple as in the case with gold. Better than expected US GDP number for Q3 and Fed’s stance over the completion of the so called monthly Bond buying program is hurting the Bullion complex. On top of that, equities were flying high during the week and added more gains on Friday as addition of stimulus from the Bank of Japan came as a shot in the arm for global markets. Overall the risk-on sentiment is playing so traders refrain from safe havens like Bullion. As per the whole week is concerned, the US Dollar was a major gainer with the currency appreciating against almost all major pairs following the aforementioned cues from FOMC and better US data. The USDX during the week gained around 1.5% to 87 marks. If we check the major cues in the coming week, we have the ECB Monetary policy meeting and also the US Non-Farm payrolls data released. Nonfarm Payrolls for October are seen rising by 230K as against last month’s addition by 248K which is surely seen as a further positive figure. Though MoM perspective shows modest fall in fresh additions; overall the year 2014 has managed monthly Jobs additions average over 225K which is its best mean addition in many years and alongside falling unemployment rate, continue to project positive aspect about the world’s largest economy. As per as silver is concerned, we believe we witnessed a curious case this week as silver which is a mix of precious and industrial metals should have had got some support from the base metals complex which gained at a good rate. Notwithstanding the movement in other commodities, silver reflecting its higher beta slipped along with gold wherein the Gold/Silver Ratio too moved towards fresh 2014 highs of 73 as per the Spot $/Ounce rates. Overall the commodity is expected to continue follow the broader trend in the complex and we recommend selling the same on pullbacks next week. In any case the whitish metal after sliding around 8% this week should see some positive correction before fresh shorts could be initiated Silver December Mcx future prices fell sharply in the last week by continuing the previous trend. As of 31 October, 2014 prices are trading at 35797, down by -6.5% from the previous week close. Initially we expect higher correction before resuming its downhill. For short term traders we recommend selling at higher levels Silver Commodity Weekly Advisory Outlook: Trend: Down Major Resistance on Upside at 36500-37400 Major Support on Downside at 34600-33400 Commodity Advisory Services Weekly Tips Sell Gold Mcx Dec on rise near 26240 sl 26550 Tgt 25940-25600 Sell Silver Mcx Dec on rise near 36200 sl 36900 Tgt 35500-35000