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R EE E K L Y P O Blow by Blow On R Bullions, T Base metals, 21 DEC – 24 DEC 2015
Energy…
MAJOR EVENTS Gold is being whipsawed as investors try to gauge the pace of future U.S. interestrate increases. After initially moving little after the Federal Reserve decided on Wednesday to raise rates for the first time in almost a decade, the metal ended Thursday down 2 per cent, the most since July 20. Bullion rose 0.5 per cent Friday as a gauge of the dollar weakened. The market has been “a bit schizophrenic” in reaction to the Fed’s decision to end an unprecedented era of ultra-easy monetary policy. “Gold is trading in line with aggregates such as the dollar, as battered investors try to understand the implications of the new era of the Fed rates for gold.”“Gold remains heavily bearish and bears have been gifted an opportunity to install another round of selling momentum throughout metals before the end of the year. With any hopes of a recovery in prices discounted, further dollar appreciation should send this zero yielding metal back towards $1,046 [an ounce] and potentially lower,” Higher rates strengthen the attractiveness of the dollar, boosting the return of deposits in that currency, while making dollar-based assets more expensive to investors using other monetary units. An increase in rates also weakens the appeal of assets like gold which don’t bear interest. Congress passed a $1.1 trillion spending measure that averts a U.S. government shutdown and ends a 40-year-old ban on crude oil exports, a plan that ensures fiscal peace in Congress through most of 2016. The Senate passed the bill 65-33 on Friday, shortly after a 316-113 House vote. The legislation, which will finance the government through September 2016, went to President Barack Obama, who signed it. US West Texas Crude gained 1.1% to $36.38 a barrel, Brent rose 0.7% to $37.32 a barrel.US oil producers will now be able to sell crude to the already saturated international market. The bulk of US oil comes from shale producers. Production and exploration companies argued the ban - imposed during the Arab oil embargo in the mid-1970s was outdated and unnecessary. Opponents claimed that lifting the ban would lead to the loss of oil refining jobs and would be bad for the environment. As a trade-off for lifting the ban, the spending bill includes tax breaks for solar and wind power and a pledge by Republicans not to block a $500m payment to the UN Green Climate Fund. The global glut meant that lifting the ban was not expected to lead to significant US exports for months or even years, but could give producers extra flexibility. It’s been a tough year for copper bulls. One of the industrial metals most associated with the boom years in China has been hit hard by the country’s lurch away from its previous fixed-asset investment growth model. Talk of the “new normal” and of a Chinese “slowdown” doesn’t capture the severity of the demand shock experienced by all the metals, copper included. On the London Metal Exchange, the price of threemonth copper peaked at $6,481 (U.S.) a ton in early May, since when it’s ground steadily lower to a current $4,550. The best that can be said is that copper hasn’t fared as badly as other metals such as nickel, which is back at the bombed-out levels seen at the worst of the global financial crisis. Copper is some way off its 2008 trough below $3,000, although that may only encourage more bear attacks, particularly in China, where shorting metals has become the hot trade for expressing a negative view on the country’s economic prospects. The demand “slowdown” in China has been exacerbated by a supply surge. Again this is not unique to copper. Producers of just about every metallic commodity were still chasing China’s “old normal” of rapid infrastructure-fueled growth even as that model was unraveling But if there is a glimmer of hope for copper bulls next year, it lies in copper’s infinitely unpredictable supply dynamics.
Gold prices on roller-coaster in wake of interestrate boost.
Congress Passes U.S. Spending Bill to End Oil Export Ban.
An unexpected development in the copper market is giving bulls some hope.
ECONOMIC CALENDER DESCRIPTION
FORECAST
PREVIOUS
Final GDP q/q
1.9%
2.1%
7:00pm
Final GDP Price Index q/q
1.3%
1.3%
7:30pm
HPI m/m
0.4%
0.8%
8:30pm
Existing Home Sales
5.32M
5.36M
Richmond Manufacturing Index
-1
-3
Dec 23 7:00pm
Core Durable Goods Orders m/m
0.1%
0.5%
7:00pm
Core PCE Price Index m/m
0.1%
0.0%
7:00pm
Durable Goods Orders m/m
-0.6%
3.0%
7:00pm
Personal Spending m/m
0.3%
0.1%
7:00pm
Personal Income m/m
0.2%
0.4%
8:30pm
New Home Sales
507K
495K
8:30pm
Revised UoM Consumer Sentiment
92.1
91.8
8:30pm
Revised UoM Inflation Expectations
2.6%
9:00pm
Crude Oil Inventories
4.8M
Dec 24 7:00pm
Unemployment Claims
9:00pm
Natural Gas Storage
Dec 25 All Day
Bank Holiday
DATE & TIME Dec 22 7:00pm
8:30pm
270K
271K
GOLD TECHNICAL VIEW MCX GOLD showed sideways movement till US interest rate hike after that it drag towards the support level of 24750. Now, if it is able to sustain below 24740 then next major support level is seen around 24450. On higher side if it maintains above 25500 then again it correct up to resistance level of 26000.
PIVOT TABLE STRATEGY Better strategy in MCX GOLD is to sell below 24740 for the targets of 2445024000, with stop loss of 25400.
S1
S2
S3
R1
R2
R3
24740
24450
24100
25360
25750
26060
SILVER TECHNICAL VIEW MCX SILVER last week showed bearish movement and took its important weekly support of 33000 and correct up to 23.6% retracement level. Now, on higher side if it maintain above 34500 then next resistance level is seen in the range of 35500-36000. On lower side if it sustain below 33000 then only bearish movement will drag it towards the new supports.
STRATEGY Better strategy in MCX SILVER at this point of time is to buy above 34600 for the targets of 35500-36000, with stop loss of 32900.
PIVOT TABLE S1
S2
S3
R1
R2
R3
33000
32500
32000
34200
35000
35500
CRUDEOIL TECHNICAL VIEW MCX Crude oil showed highly bearish movement and broke its important support level of 2500, also closed below it and broke falling wedge pattern on daily chart. Now, if it sustain below 2500 then next important support level is seen in the range of 2300-2200. On the other hand maintaing above 2550, again pull it towards the resistance level of 2700.
PIVOT TABLE
STRATEGY Better strategy in MCX CRUDEOIL is to sell below 2300 for the targets of 22002100, with stop loss of 2550.
S1
S2
S3
R1
R2
R3
2300
2150
2000
2540
2700
2905
COPPER TECHNICAL VIEW MCX Copper last week showed bearish movement and broke the upward channel pattern on lower side and found support around 302.50. Now, if it sustain below 302 then the next important support is seen around 294. On higher side if it maintain above 315 then 325 will act as major resistance level above which trendline breakout will expected.
PIVOT TABLE
STRATEGY Better strategy in MCX COPPER is to sell below 310, with stop loss of 325 for the target of 300.
S1
S2
S3
R1
R2
R3
302.75
293.50
285
316.40
325.75
335.50
DISCLAIMER
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