Commodity weekly Report

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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

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Transcript of Commodity weekly Report

Page 1: 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

Page 2: Commodity weekly Report

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.

Page 3: Commodity weekly Report

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%

Page 4: Commodity weekly Report

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.

Page 5: Commodity weekly Report

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

Page 6: Commodity weekly Report

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