Us gdp and ecb bank stress tests and commodity trading tips

US GDP and ECB Bank Stress Tests and Commodity Trading Tips Gold Commodity Trading Market review our last week report, we had stated a bearish outlook in gold wherein we suggested a sell near $1245-1250. Gold is seen trading at $1230 almost going correct in the weekly outlook however, during the week, we had a little chaotic scenario when gold breached $1250 mark and tested a high of $1256. Nonetheless, we had also highlighted the fact that the commodity may remain volatile so the same was noticed during that week. Several reasons and strategies we had explained and the same shall be reiterated in this report and present an outlook for the next week. We talked about USD performance and its impact on the many asset classes so on gold. The same had repeated during the week, as of Friday the USD index has gone up again making the gold and other precious metals lower. Going with the same stance then possibly gold may continue to trade down. In fact the euro performance which was down; moved along with gold and likely that euro the shared currency may continue to remain down which can possibly further pull gold prices lower. For the coming week is concerned, we hold a bearish stance on gold and that looks more apparent however, volatility is something which cannot be ruled out especially when we have the FOMC meeting scheduled on 29th of October 2014. The detailed FOMC meeting and its likely impact shall be explained in our in-house economic report while we believe any strong comment from the Fed would bring down gold further lower. In fact we are in the same hope that Fed may talk something positive about the economy unlike it spoiled everyone in the latest minutes.

Now, talking about a little unusual about the market scenario Investors have plenty to be concerned about: Russian-inspired insurrection in Ukraine, Occupy Central protests in Hong Kong, the swell of Ebola from Africa to Europe along with the U.S, battle in the Middle East. One thing they can leave off the list is inflation which was again disappointing in the US and many other countries in the world. So, we do not talk about anything like inflationary hedging on gold. We talk about the consumption front, though gold import in India and China rose a tad in the last month possibly due to festival season but we do not expect the same scenario to persist again in October or November. The data shows, Swiss gold exports to India almost doubled to 58.5 MT in the last month as per the Swiss customs data showed Oct. 21; volume this month for benchmark spot contract on Shanghai Gold Exchange average 28% more than this year’s average. However, we do not expect the same scenario to be seen in October. So, developing an outlook on gold for the coming week looks persistently bearish.

Lastly, we shall talk about the derivatives front, we saw prices declined a tad in the week where in the volume has declined a little while the open interests remained higher. This indicates the commodity may remain mostly volatile while any fresh development could pull down the gold prices. Overall, we hold a bearish outlook on gold in the next week. As far as strategy is concerned, we recommend selling the commodity near $1240-1245 (levels where we had suggested in the last week) however; aggressive trader may sell near $1235/137 and may make a dollar cost averaging from the above mentioned levels for a possible target of $1222 and then $1210. In any adverse scenario the stop loss should be above the last week high of $1256 or conservative traders’ may keep the stop loss above $1266 Gold Weekly Technical Analysis: Resistance on Upside at 27514-27852-28190 Support on downside at 26964-26752-26414 Trend Deciding level at 27302 Silver Commodity Trading Market, We had a selling bias, wherein we felt largely weaker set of economic reports from top consumer China and expectations that the big brother gold would see deceleration from higher levels would continue to put pressure on the commodity. As of latest quote, Silver Comex Dec contract is weaker by around 0.9% to trade near the $17.20 per ounce mark. In Indian price related

performance was almost similar to Rs 38075 per Kg for the active MCX Contract, volumes however quite low amidst holidays locally due to Diwali and a truncated last trading day.

As of the major data variables are concerned, we re-iterate the most important cues for the Bullion segment would continue to be FED meeting wherein cues from US GDP and ECB Bank stress tests would also be looked upon. Gold and silver considered as a safe haven commodities might see good volatility in case markets get concerned over some of these issues. While there are no major data variables due from China next week, the direction for silver commodity would depend mostly on movement in Gold and Base metals complex. This week we saw the Q2 Chinese GDP data which on a surprising note stood better than expected to 7.3% against markets forecasts of a reading near 7.2%, wherein broadly traders were already planning for a further lower number. However, major issues which should be noted is the fact that Chinese equities notwithstanding the better GDP gauge were the only major global equity indices to close down this week. Equities fell following some weaker communal paycheck reports and opportunity that overall the world’s second largest economy would continue to remain subdued in medium-term. China being major industrial user consumer is likely to continue weigh on silver whereas rising USDX is another issue which should keep the commodity under pressure. We hold selling bias in the commodity next week, however looking at US related cues, it is better to sell the whitish metal on pullback only Silver Weekly Technical Analysis: Resistance on Upside at 42010-45945-49880 Support on downside at 31105-24135-20200 Trend Deciding level at 35040 Commodity Trading Tips Sell Gold Mcx Dec on Rise near 27300 sl 27650 Tgt 27000-26800 Sell Silver Mcx Dec on Rise near 38500 sl 39000 Tgt 38000-37500 Sell Crude Oil Mcx Nov on rise near 5000 sl 5130 Tgt 4870-4820