Daily Market Update Report as on Wednesday, August 29, 2018

Transcription

1 Daily Market Update Report as on Wednesday, August 29, 2018 Gold has edged modestly higher again in yesterday s session in response to currency-market movements, and the yellow metal may have more upside in store, assuming the U.S. dollar continues to cooperate. Gold tends to move inversely to the greenback. Gold prices edged to a fresh two-week high on Tuesday thanks mostly to a depreciating U.S. dollar. The fact that the yellow metal continues to appreciate despite global risk sentiment boosted by the U.S.-Mexico trade breakthrough just further highlights how gold remains heavily influenced by the dollar. With the greenback likely to experience further weakness following [Federal Reserve Chair Jerome] Powell s dovish speech at the Jackson Hole symposium, gold has scope to appreciate further. Gold loses its lustre as demand decreases - Gold is perceived as a safe-haven asset. Yet, despite the sharp declines in emerging market currencies, and the rally in other traditional safe-haven assets such as the Japanese yen, the gold price has dropped steadily, losing around 12% over the past four months. According to the World Gold Council, total gold demand in the first half of the year hit its lowest since In its weekly economic and market overview, OAM noted that the decline in the gold price is attributed to the strength of the US economy, rising US interest rates and a burgeoning US dollar. Floods in Kerala may hit wedding season gold demand - Jewellers in India's biggest gold-buying state expect sales to drop during the peak festival and wedding season after heavy rains and floods caused more than $3bn of damage. The usual spend of 200 grams to 1 kilogram of gold per wedding in Kerala may drop 50% in the next month, B Govindan, president of the All Kerala Gold & Silver Merchants Association, said in a phone interview. The death toll in Kerala has climbed to at least 370 since the monsoon started in June and nearly 1mn people have taken shelter in relief camps. The state's other major industries including tourism and rubber also are expected to be affected, while coffee production is facing a 21-year low. World Gold Council s Gold Outlook For H The WGC has apparently speeded up its publishing. They have issued a few interesting pieces recently. In this edition of the Gold News Monitor, we discuss them. First of all, the WGC published a new edition of its quarterly report on gold demand. What does Gold Demand Trends Q say about the demand for gold in the second quarter of the year? According to the WGC data, the gold demand decreased 4 percent to tons in the second quarter of During the whole half of the year, the demand for the yellow metal amounted to 1,959.9 tons, the lowest level since Gold to reclaim $1,300 an ounce by the end of Gold is poised for a big short-covering rally, with the metal only needing a fresh catalyst, said Commerzbank. The German bank said it looks for the precious metal to reclaim $1,300 an ounce by the end of the year. Some investors may be rethinking gold s historical status as a safe haven, but we wouldn t go that far, the analysts said. The metal has fallen despite a number of geopolitical concerns, such as a currency crisis in Turkey and the U.S.-China trade war. Date Gold* Silver* 28 Aug 2018 (Tuesday) Aug 2018 (Monday) Aug 2018 (Friday) The above rate are IBJA PM rates * Rates are exclusive of GST 28 Aug 2018 (Tuesday) Page 1

2 Outlook: Gold prices seen pressure as U.S. Treasuries rose after the United States and Mexico struck a trade deal, with ongoing U.S.-China tensions would continue to weigh. For the day prices a jump towards will look to sell with a stoploss of above expecting prices to drop towards level. MCX GOLD Market View Daily Levels Open High Low Close Value Change % Change Margin Margin (Rs.) Volume Open Interest Cng in OI (%) Prev Value(Mln) 52 Week High 52 Week Low Resistance Support Spread DEC - OCT FEB - DEC Gold pared gains as U.S. Treasuries rose after the United States and Mexico struck a trade deal, with ongoing U.S.-China tensions would continue to weigh. U.S. Treasury yields rose across maturities to weekly highs as global trade war fears abated a day after the United States and Mexico reached agreement on an overhaul of the North American Free Trade Agreement (NAFTA). The easing of trade tensions prompted investors to reduce safe-haven positions in U.S. government debt. Sales of long-term Treasuries in particular pressured prices and drove yields up more at the long end of the curve, indicating bullishness about the economic outlook. U.S. and Chinese officials ended two days of talks last week with no major breakthrough as their trade war escalated with activation of another round of duelling tariffs. The dollar, which had risen recently on safe-haven buying from investors nervous about the trade dispute and U.S. interest rate hikes, slipped to four-week lows on Tuesday after a trade deal between U.S. and Mexico. In recent months, investors have sought safety from global trade conflict in U.S. Treasuries, which entails buying dollars. In Washington, Canada s main trade negotiator was in talks to preserve a three-nation North American Free Trade Agreement following Monday s deal between the United States and Mexico. Holdings of SPDR Gold Trust, the world s largest gold-backed exchange-traded fund, fell 0.62 percent to tonnes on Tuesday from Monday. Technically market is under short covering as market has witnessed drop in open interest by -3.34% to settled at 7789 while prices up 22 rupees, now Gold is getting support at and below same could see a test of level, And resistance is now likely to be seen at 30155, a move above could see prices testing Page 2

3 INT. GOLD$ Market View Daily Levels Open High Low Close Value Change % Change Resistance Support Outlook: Gold price bounced downwards clearly to move below level, which might force the price to test areas before turning back to rise again. Therefore, it is important to monitor today s close and tomorrow s opening according to level to confirm the next intraday destination clearly. Gold dropped as U.S. Treasuries rose after the United States and Mexico struck a trade deal, with ongoing U.S.-China tensions would continue to weigh. U.S. Treasury yields rose across maturities to weekly highs as global trade war fears abated a day after the United States and Mexico reached agreement on an overhaul of the North American Free Trade Agreement (NAFTA). The easing of trade tensions prompted investors to reduce safe-haven positions in U.S. government debt. Sales of long-term Treasuries in particular pressured prices and drove yields up more at the long end of the curve, indicating bullishness about the economic outlook. U.S. and Chinese officials ended two days of talks last week with no major breakthrough as their trade war escalated with activation of another round of duelling tariffs. The dollar, which had risen recently on safe-haven buying from investors nervous about the trade dispute and U.S. interest rate hikes, slipped to four-week lows on Tuesday after a trade deal between U.S. and Mexico. In recent months, investors have sought safety from global trade conflict in U.S. Treasuries, which entails buying dollars. In Washington, Canada s main trade negotiator was in talks to preserve a three-nation North American Free Trade Agreement following Monday s deal between the United States and Mexico. Holdings of SPDR Gold Trust, the world s largest gold-backed exchange-traded fund, fell 0.62 percent to tonnes on Tuesday from Monday. Technically now Gold is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing Page 3

4 Rupee registered fresh closing lows at 70.16, weighed down by a surge in crude oil prices and weakness in Turkish lira even though the Chinese Yuan strengthened in the previous few sessions. While the USD extended losses yesterday as major currencies continued their recovery. USDINR key resistances are seen at and while on the other side, initial supports are seen at and marks respectively. USDINR Market View Daily Levels Open High Low Close Value Change % Change Margin Margin (Rs.) Volume Open Interest Cng in OI (%) Prev Value(Mln) 52 Week High 52 Week Low Resistance Support Spread OCT - SEP NOV - OCT Rupee traded in range on buying by nationalised banks likely on behalf of oil importers who need it for their month-end dollar payment. State Bank of India along with few other nationalised banks bought dollars, mostly for oil importers. The US and Mexico reached a 16-year trade deal replacing the North American Free Trade Agreement, or NAFTA. Also talks with Canada are expected to begin immediately in hopes of reaching a final agreement by Friday, said a senior US trade official. Federal Reserve Chairman Jerome Powell defended the U.S. central bank s push to raise interest rates as healthy for the economy and signaled more hikes were coming despite President Donald Trump s criticism of higher borrowing costs. The Fed, which began to tighten monetary policy in 2015, has raised rates twice this year and is widely expected to do so again next month and in December. Speaking at a research symposium in Jackson Hole, Wyoming, Powell said he wanted to explain why my colleagues and I believe that this gradual process... remains appropriate. India s trade deficit widened to a more than five year high of $18.02 billion in July, the trade ministry said, driven largely by a surge in oil imports. Though merchandise exports rose percent year-on-year in July, the trade deficit widened as oil imports surged percent to $12.35 billion. Technically market is under fresh selling as market has witnessed gain in open interest by 32.14% to settled at , now USDINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing Page 4

5 Gold Spot 995 Gold Spot 999 Exch. Descr. Last* Exch. Descr. Last* CMDTY Gold Ahmedabad CMDTY Gold Ahmedabad CMDTY Gold Bangalore CMDTY Gold Bangalore CMDTY Gold Chennai CMDTY Gold Chennai CMDTY Gold Cochin CMDTY Gold Cochin CMDTY Gold Delhi CMDTY Gold Delhi CMDTY Gold Hyderabad CMDTY Gold Hyderabad CMDTY Gold Jaipur CMDTY Gold Jaipur CMDTY Gold Kolkata CMDTY Gold Mumbai CMDTY Gold Mumbai * Rates including GST * Rates including GST Silver Spot 999 Bullion Futures on MCX Exch. Descr. Last* Exch. Descr. Last CMDTY Silver Ahmedabad MCX GOLD 04AUG CMDTY Silver Bangalore MCX GOLD 05OCT CMDTY Silver Chennai MCX GOLD 05DEC CMDTY Silver Delhi MCX SILVER 05JUL CMDTY Silver Hyderabad MCX SILVER 05SEP CMDTY Silver Jaipur MCX SILVER 05DEC CMDTY Silver Kolkata CMDTY Silver Mumbai * Rates including GST Bullion Futures on DGCX Gold and Silver Fix Exch. Descr. Last Exch. Descr. Last DGCX GOLD 26SEP CMDTY Gold London AM FIX DGCX GOLD 28NOV CMDTY Gold London PM FIX DGCX GOLD QUANTO 27SEP CMDTY Silver London FIX DGCX GOLD QUANTO 29NOV DGCX SILVER 29AUG Gold / Silver Ratio DGCX SILVER 28NOV Exch. Descr. Last DGCX SILVER QUANTO 30AUG INTL. SPOT GOLD SILVER RATIO DGCX SILVER QUANTO 29NOV MCX MCX GOLD SILVER RATIO Page 5

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