Jul 21
2015

PVO Data Push Bullion Step Up and Commodity Tips

Ingot Comex made a low of $1233 and touched a supereminent near the $1255 an ounce. While markets have continued to trade in a range, we feel the inherent bias into the commodity still continues to be weak. During the previous week ended 10th on January, the US Labour department reported disappointing set of employment numbers wherein new Jobs addition stood highly lower at 74K. This was one of the reasons for gold prices to recuperate its losses in previous week and close with moderate gains.

Markets anticipated that weak US Jobs data could peddle the Fed to postpone its tough stance of trimming down the monthly bond purchase program by additional amount in the expected policy meet. Thus yellow metal stepped up. However, as per latest update the Fed Managers undergo continued to maintain their broad bullish bias into the US economy and also extended their speculation for another trimming down in bond purchase slate in future. Midst the common week, Fed President of Philadelphia and Dallas called for continued reduction about the central bank’s bond-buying program furthermore thus supporting the positivism for the US Dollar which inched higher in the latter hemisphere of the week.

While on one side physical take for the metal continued to be high, it usually is not a major determinant in price discovery. News report showed demand from China continues to be strong; similarly we are seeing decent increase in demand from Western countries. A recent Bloomberg news report said US Mint gold-coin sales stood near 63,000 ounces till the mid of January and already moving above the 56,000 ounces sold in all of December. Separately the UK’s Royal Mint recently said it ran out of 2014 Sovereign gold coins on “exceptional demand.” However, we are not seeing any major change in mood from the institutional side. As per current update, assets in the SPDR Gold Trust, the biggest gold backed ETP stood near 790 MT, its lowest levels in nearly five years. The only respite for gold that; it is not witnessing any important fresh selling pressure from institutional side lately.

While looking at the PVO data also suggests there is static cautiousness in the markets. While gold prices went left-right and centre in the hindmost week, total trading volumes for February expiry Comex fell by near 30% that of the data till Friday eventide (IST). The OI too stood submerge by 13% as of cumulative available data vault Thursday’s session as traders wait for the metal to sunder in either direction before building in fresh positions.

On the whole we sense prices continue to trade in a broad $20-25 via ounce range between $1230 on the lower side and $1255 on the higher side. While a major move in either command would be watched closely for further constructive move into the commodity, our bias continue to be weak. On Technical grounds too, for the last three weeks we had been mentioning about the dangerous resistance zone near $1250-1255 per ounce. Until and unless that sector is breached firmly, we would continue to hold our bearish bias in the commodity. Our anticipation on the Rupee moreover strengthens our view wherein we feel broadly the currency would add modest appreciation against the USD backed by local factors, although the fact that we have a positive bias in the US Dollar File

Gold February MCX futures prices moved in a narrow range of 29314-28865 in the last week. Weekly candle closing resembles “Doji” pattern suggesting dubious movements. As per the fibonacci truth prices are witnessing a stiff resistance at 29377 (38.2 percent retracement of the classify 28075-30679). On the lower side supports are seen at 28689 (23.6 percent) followed by 28075(previous weeks low). Key resistance level to watch for the week is at 29377 (50 procent retracement). For short idiom traders we suggest selling.

Silver we feel larger quantum of movement into the commodity would be traced by the overall direction in the former metal. However, after a large movement in the base metals complex endmost week there is a grand probability of similar large movement continuing in the next week. Our though is likewise based on the fact that we fool major GDP further other manufacturing sector readings from China, the world’s largest consumer concerning industrial metal. While the markets are anticipating the economy to be continuing its downward spiral, we feel traders should be ready for moves in either direction. Though total biased seems negative for Chinese economy when we look at the latest batch of other internal readings in the country, there could breathe a dazzling factor as almost all of market is holding on strong negative bias.

Additionally when we see silver PVO, volumes have shrunk by near 26% whereas OI has remained stable depicting lower participation from traders. While the US economy has no major material for larger part of the sequacious week, evolution in the Dollar which is waiting for a major positive breakout as per technical charts along with important data points from China could produce volatility into the metal space. Silver being a high beta staple and also having a mix of precious and base metals could see wide movements in either direction of trade. While following plus our broad slant into the bullion space, we are advising traders to look for selling on pullbacks. However, we are also recommending buying above approach on technical grounds in the metal next week; in case prices see a strong arbitrary break-out

Silver March MCX futures prices are trading in a consolidation range and expected to continue the self trend. As per the fibonacci principle, prices are witnessing a stiff resistance at 45990 levels (38.2% retracement regarding the length 51821-42385). From the past seven week’s prices failed to post a closing above 45990 levels which has left the downside cues to remain intact. For short term traders we suggest selling as long as above 46000 hold

Commodity Tips

GOLD MCX FEB SELL ON RISE Approximately 29180 SL 29450 TGT 28910-28700

SILVER MCX MAR Vend ON RISE NEAR 45050 SL 45900 TGT 43900 {OR} BUY SILVER MCX MAR ABOVE 46000 SL 44900 TGT 47300..

Article Source: http://www.charanwings.com/blog/post/PVO-Data-Push-Bullion-Step-Up-and-Commodity-Tips