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WEEKLY COMMODITY MARKET TECHNICAL REPORT

WEEKLY COMMODITY TECHNICAL REPORT 18 November TO 22 NOV 2013

Global Gold demand drops 21% in Q3, 2013, jewellery demand up.

Global gold demand has fallen 21% in third quarter of 2013 at 869 tons, while gold jewellery demand rose marginally from 462 tons to 487 tons, according to World Gold Council. The gold market has been resilient despite the seasonally weak July to September quarter and demand remained strong across most countries and sectors, WGC said.

The exceptions were gold-backed ETFs, which had net outflows of 119t this quarter, compared to 402t in Q2 2013, and India where the result of government intervention in the Indian gold market was to reduce demand by 71t this quarter. Consumer demand globally - the strength of jewellery and bar and coin demand in 2013 to date can be seen when compared against the first three quarters of previous years. As of the end of Q3 2013, demand stood at 2,896t, 26% higher than the same year-to-date figure in 2012. "The growth we are seeing in jewellery, bars and coins in particular, demonstrates once again the unique diversity of gold demand, as different sectors increase in prominence at different points in the global economic cycle, clear evidence of the ebb and flow of what is an extremely liquid market."

India Crude Oil bearish, EIA data may put further pressure.

Crude oil prices in the global market remained weak on Thursday due to concerns over higher than expected crude oil inventories and fears that US Central Bank may roll back its monetary stimulus later this year on improving conditions of the United States. However, the statement from Yellen may have limited further weakness in the commodity prices. Janet Yellen, nominee to lead the US Fed, said on Wednesday that economy and labour market are still weak and Fed continue to support the economy through its monetary stimulus program.

WTI crude oil for December delivery on NYMEX was seen trading with a loss of 15 cents at $93.73 per barrel as of 17.02 IST on Thursday.

India crude oil futures edged down on Thursday and were seen trading bearish tracking bearish international cues. Crude oil futures for November delivery on India's Multi Commodity Exchange (MCX) was seen trading with a loss of 0.64% at Rs.5945 per barrel as of 16.34 IST on Thursday.

Fall in China grid spending, higher Copper output may weigh on demand.

A decline in Chinese grid spending is expected to weigh on copper prices in the global market. China power grid investment fell again in October, by 14% year-on-year basis, the second straight monthly fall.

However, a sizable batch of state grid tenders in late September could also support spending figures toward year-end. The trend is toward steady moderation as gridcos bring full-year spending in line with their targets. Physical indicators suggest that the H1 wave of investment has now passed through the supply chain in the form of robust orders and concrete project completions.

Meanwhile, a higher than expected world copper production is likely to weigh on the base metal prices. Analysts don't expect a significant jump in the commodity prices despite recovering US and European economies.

World refined copper production is estimated to have increased by around 5.6% (650,000 t) in the first seven months of 2013 compared with refined production in the same period of 2012. Primary production was up by around 4.5% (420,000 t), and secondary production (from scrap) increased by 11% (230,000 t), according to (ICSG).

MCX GOLD Technical Trend

MCX GOLD on its daily charts showed sideways to bullish movement due to rupee depreciation and closed above the upper band of triangle pattern. If it able to break 30500 then breakout of triangle pattern on higher side is expected and it may find resistance around 31150. On other hand if it maintains on lower level then 29550 will act as major support.

STRATEGY

Better strategy in MCX GOLD is to buy above 30500 for the targets of 31150-31550 with stop loss of 29500.

SILVER Technical Trend

MCX SILVER last week showed bearish movement and took reversal from trendline acting as resistance and broke major support level of 47700. Now, immediate support for it is seen around 46500 below which it may drag towards next support level of 45800. On other hand if it able to break 47800 on higher side then it may find next resistance around 49150.

STRATEGY

Better strategy in MCX SILVER at this point of time is to buy on dips for target of 49100, with stop loss of 44850.

MCX CRUDEOIL Technical Trend

Crude oil last week was not able to maintain on higher side and took stiff resistance around 6100 and showed downfall to close around 61.8% retracement. Now if it able to sustain below it then again blood bath may continue. On higher side 6110 will act as important resistance only above which some positive movement is expected.

STRATEGY

Better strategy in MCX CRUDEOIL is to sell on highs for the targets of 5710-5600 with stop loss of 6120.

MCX COPPER Technical Trend

MCX Copper last week voilated the stiff resistance of 460 and strongly rebounded towards major support of 440 and closed below trendline on weekly chart. Now, if it sustains below 437 then next support is seen around 427. On higher side immidiate resistance is seen around 450 and if it holds above this then some strength is expected.

STRATEGY

Better strategy in MCX COPPER is to sell below 437, with stop loss of 450 for the target of 427.

Source : trifid research