Commodity Weekly Report for 20/May/2013 – 25/May/2013

kailashtrifid Mon May 20, 2013 12:28 pm

Silver gross longs hovering around August lows, gross shorts doubled.

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 slips towards $103 on demand growth worries, stronger dollar.

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.

Base Metals subdued despite positive UK data.

The coldest March since 1962 helped the UK to enhance its industrial output for the month as cold weather boosted demand for oil and gas. But with Chinese CPI subdued, copper and other base metals failed to cash in on the trend.Meanwhile, mining and quarrying dipped 2% in March with oil and gas exploration dropping 1.8%.Manufacturing jumped 1.1% in March; eight of the thirteen categories declined in March from February even as five increased. The gain was led by basic metals and metal products along with computer and electrical equipment.On India’s MCX, copper futures for delivery on June 28 was seen trading at Rs.401.3 a kilogram, a loss of 0.66% as of 02.41 PM IST.Comex copper futures for delivery on July 13 was seen trading at $3.334/ pound, a loss of $0.037 or 1.09% as of 02.51 PM IST. Chinese CPI climbed 2.4% in April 2013 y/y.

MCX GOLD Technical Trend

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.

STRATEGY

Better strategy in MCX GOLD is to sell below 25690 for the targets of 25000-24750 with stop loss of 26600.

MCX SILVER Technical Trend

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.

STRATEGY

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.

MCX CRUDEOIL Technical Trend

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.

STRATEGY

Better strategy in MCX CRUDEOIL (JUNE) is to buy on dips for the target of 5500-5600 with stop loss of 5140.

MCX COPPER Technical Trend

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.

STRATEGY

Better strategy in MCX COPPER will be buy above 412, with stop loss of 399 for the target of 421.

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