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Web Special: Evening commodity update

SI Reporter/Mumbai 09 Jul 12 | 06:40 PM

Anxiety over global economic growth and persistent concerns over long running Euro Zone debt crisis continue to dampen the market sentiments. Commodities and equities were under pressure on dreary economic prospects and very little hope from the Euro-area finance ministers’ meet later today. Euro was hovering near its two year low against the US dollar. Precious metals traded mostly steady. Spot gold was little changed while, spot silver ticked up. Investors choose to stay on the sideline for fresh cues after the weekend fall on a sluggish US jobs data. In the Indian market, initial attempts were to move up backed by feeble rupee. Yet, gains remained restricted owing to weakness in the international market. Base metal threw mixed signals with complex in Shanghai Futures Exchange mostly in red while, in the LME metals traded steady. China’s inflation data for the month of June released earlier today indicated a cool off in price levels, which ignited hopes of further monetary stimulus. LME copper was tad up snapping three consecutive sessions of losses. Increased possibility of supply disruption from Norway and Iran lifted crude oil prices. Nymex and Brent crude oil inched up after talks between employers and striking workers were unsuccessful threatening full closure of oil production from Norway, the world’s eighth largest crude oil exporter.

Events in Focus

Market sentiments remained skeptical ahead of another round of EU- finance ministers meeting in Brussels, slated to begin today evening. The talking points are likely to revolve around assistance for Spain and Greece. After the rate cut action by key central banks across the globe last week, financial markets would be keenly watching for the U.S FOMC minutes on Wednesday. An indication of further quantitative easing would be very welcome. Chinese inflation numbers, which fell to a 29-month low earlier today, could give some leeway to the chinese central bank which had recently cut its rate for the second time in less than few weeks, for further stimulus action. However, the recent action is calling for a ground reality check that a hard landing could become inevitable for the Chinese economy. The week is lined up with some crucial economic numbers from China in terms of Industrial production, GDP and retail sales. With regard to crude oil prices, the events transpiring in Norway and Iran would be fervently watched for, as price action off-late has been driven by the mentioned countries. The week in particular is light on economic data from the U.S and markets are likely to remain hostage to events evolving in Europe and China.

Technical Commentary

GOLD Mini
MCX June

 
Prices have been consolidating with a neutral mode. Even in this wandering picture, a bullish move is expected only above 29760 region with brawny volumes and such accomplish trades could lift prices toward 29840/29900 or even higher towards 30120.Else, we may see a long liquidation pressure towards 29490/29320 or even lower towards 29130.

SILVER Mini
MCX June


The reactionary bounce from 53000 has overshadowed the bear attempts and prices turned higher. For the day, initial moves are likely to be restricted near the immediate resistance of 53900 and correct lower. 52400/51900 are the measured downside objectives once such selling is triggered.

COPPER
NCDEX/MCX June


Recent swing low support of 424 seems formidable, breaking of which is highly required to trigger further selling pressure. Else, we could see prices turn higher possibly towards 432.

NICKEL
MCX June


As long as prices stay below 923, negative bias is intact and prices likely to continue the bearish momentum towards 908 initially followed by 888 later. A direct rise above 935 would be required to dent our bearish expectations and take prices higher.

CRUDE OIL
NCDEX/MCX June

 
The prices have to breach above 4775 region to continue the buying momentum towards 4810/4860 levels. On the contrary, inability to break above could see prices taking dip to target levels of 4710/4680. On the whole, broad buying sentiment is in tact.

Source: Geojit Comtrade

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