Commodity weekly Report
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Transcript of Commodity weekly Report
20 MAY – 25 MAY 2013
W E E K L Y
R
E
P
O
R
T
Blow by Blow
On
Bullions,
Base metals,
Energy…
WWW.TRIFIDRESEARCH.COM
MAJOR EVENTS In terms of speculative positioning, silver gross longs are hovering around August
lows, while gross shorts have doubled over the course of the year as of May 16.
Net Comex non-commercial positions as a percentage of open interest is low at just
9%. Only retail demand has bucked the trend, with strong coin sales. The US Mint
reported sales of 4.087Moz in April, the highest since January 2012, but this alone is
not sufficient to support prices. Silver prices have followed in the tracks of gold but,
given its weak fundamentals, have endured additional pressure, tumbling to levels last
reached in September 2010. Given the healthy supply backdrop, silver has struggled
to draw support from either investor activity or industrial demand. Silver ETPs have
held up relatively well compared with gold, with net redemptions of 148 tons in April,
the first month of net outflows since November last year (155 tons). Total metal held
in trust rests at 20,061 tons, 206 tons below the peak set earlier in the year. Flows
have remained weak into May, albeit also at a slower pace than gold at 10 tons.
China’s Silver imports were down by 25% y/y, to 195.98 tons in March, and exports
rose by 44% y/y, to 109.9 tons, keeping China a net importer of silver.
Brent futures slipped towards $103 a barrel on Friday as disappointing US economic
data revived worries over demand growth in the world's biggest oil consumer, while a
stronger dollar also pressured prices. Barring news on major supply disruption, the
dollar will be a key driver for oil as investors increasingly expect the greenback's
recent surge to peter out.
Brent crude had slipped 14 cents to $103.64 a barrel by 0321 GMT, with the June
contract that expired in the previous session settling up 12 cents. It is expected to
end the week unchanged.
US oil slipped 6 cents to $95.11, after settling 86 cents higher. The contract is poised
to end three straight weeks of gains. "The dollar will influence oil quite a bit over the
next few sessions because at some point it will start to weaken as it has strengthened
too much in recent days”. "All US economic indications in the last few days have been
weak and that is raising doubts about demand."
Brent slips
towards $103 on
demand growth
worries, stronger
dollar.
LME Copper
prices may
average
$7,673/ton in
2013.
Copper prices on London Metal Exchange (LME) may average $7422/ton in Q3 and
$7,653/ton in Q4 2013, making the average copper fair-value price for 2013 around
$7,673/ton. LME copper prices have experienced a roller coaster ride in Q2 13.
Disappointing data from the US, Europe and China in early May prompted a sudden
sell-off, but the price has since recouped some of these losses, rising about 7.2% MTD.
The main movements in fundamentals since Q2 13 have actually been price-
supportive. The copper market has been relatively tight, and the global stocks-to-
consumption ratio started falling and is estimated to be 3.6 weeks of demand in May
(versus 3.8 in Q1). This trend is expected to persist, reaching around 3.3 weeks by the
end of Q3. Although Barclays’ Global IP index shows flat growth so far this year, YTD
growth in the S&P 500 index has accelerated to nearly 16.7%, and MTD it has
increased over 4.5%. Meanwhile, the copper-consumption-weighted leading indicator
has been improving steadily since the beginning of 2013, increasing to 50.7 in May
from 50.3 the previous month. Therefore, the model shows that LME copper prices
have been significantly undervalued in April and May, compared to the fair-value
prices of $7,800 and $7600/tonne, respectively.
Silver gross longs
hovering around
August lows,
gross shorts
doubled.
E C O N O M I C C A L E N D E R
DATE & TIME DESCRIPTION FORECAST PREVIOUS
May 20, 10:30pm FOMC Member Evans Speaks
May 21, 7:30pm Treasury Sec Lew Speaks
9:00pm FOMC Member Bullard Speaks
10:30pm FOMC Member Dudley Speaks
May 22, 7:30pm Existing Home Sales 4.99M 4.92M
7:30pm Fed Chairman Bernanke Testifies
7:30pm Treasury Sec Lew Speaks
8:00pm Crude Oil Inventories -0.6M
11:30pm FOMC Meeting Minutes
May 23, 3:35pm FOMC Member Bullard Speaks
6:00pm Unemployment Claims 347K 360K
6:30pm Flash Manufacturing PMI 52.3 52.1
6:30pm HPI m/m 0.9% 0.7%
7:30pm New Home Sales 429K 417K
8:00pm Natural Gas Storage 99B
May 24, 6:00pm Core Durable Goods Orders m/m 0.6% -1.5%
6:00pm Durable Goods Orders m/m 1.8% -6.9%
S1 S2 S3 R1 R2 R3
25690 25250 24750 26350 26975 27500
S1 S2 S3 R1 R2 R3
42000 40500 39000 44060 46000 48600
T E C H N I C A L V I E W
MCX GOLD on daily charts gave
breakout of symmetrical triangle
pattern on lower side and dragged
towards its deeper supports. Now if
this bearish movement continues then
major support is seen around 25270.
On other hand some correction may
lead it up to 26600 and only above the
crucial level of 27000 bull trend is
expected.
S T R A T E G Y Better strategy in MCX GOLD is to sell
below 25690 for the targets of 25000-
24750 with stop loss of 26600.
PIVOT TABLE
G O L D
PIVOT TABLE
S I L V E R
T E C H N I C A L V I E W
MCX SILVER on daily charts after
breaching the lower side of triangle
pattern showed a free fall below the
strong support of 44050. Now if these
bearish movement continues then
major support range is seen around
42000-41300. On other hand 44050 will
act as resistance for it above which
46000 will act as next major resistance.
S T R A T E G Y Better strategy in MCX SILVER at this
point of time is to sell below 42250 for
target of 41280-40500, with stop loss of
44000.
C R U D E O I L
C O P P E R
S1 S2 S3 R1 R2 R3
5235 5090 4950 5370 5500 5650
S1 S2 S3 R1 R2 R3
400 389 379 412 421 430.15
T E C H N I C A L V I E W
MCX Copper was unable to sustain
above its resistance level of 50%
retracement and closed around it.
Now, if it able to break its resistance
of 412 then next resistance is seen
around 61.8% retracement i.e. 420. On
lower side 400 is seen as immediate
support for it below this it is in weak
zone and may find next support
around 23.6% retracement i.e. 387.50.
S T R A T E G Y Better strategy in MCX CRUDEOIL (JUNE) is
to buy on dips for the target of 5500-5600
with stop loss of 5140.
PIVOT TABLE
T E C H N I C A L V I E W
Crude oil on daily charts moves in an
upward channel pattern and closed
around its resistance level of 5320,
above this next resistance is seen
around upper band of channel i.e.
5400. If it takes some correction from
current levels then strong support is
seen near 5200, below this it is in weak
zone and may find support around
lower band of channel.
S T R A T E G Y Better strategy in MCX COPPER will be
buy above 412, with stop loss of 399 for
the target of 421.
PIVOT TABLE
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DISCLAIMER