Weekly Newsletter Commodity- 6 June 2018
FOCUS OF THE WEEK Gold future prices traded steadied today despite support from a retreat in the dollar as Italian political risk receded, but the prospect of a further U.S. interest rate rise expectation by the Federal Reserve kept a lid on gains. The metal fell in last couple of days after stronger than expected U.S. payrolls data lit up the expectations that the Fed would press ahead with another rate hike at its meeting on 12th of June. The Fed aim of keeping inflation at a rate of 2% or below as gold is sensitive to moves higher in U.S. rates, which lift the opportunity cost of holding the non-yielding precious metal. Oil prices fell today as U.S. production hit a record high and as OPEC members considered boosting supply. U.S. crude production has been rising to record levels since late last year. Last month it jumped 215,000 barrels per day (bpd) to 10.47 million bpd as per the EIA data. Prices in recent sessions have declined on concerns that the Organization of the Petroleum Exporting Countries and non-opec members led by Russia would decide to lift output by up to 1 million barrels a day as early as this month in reaction to lost supplies out of Venezuela and Iran amid the concern price fell from its high level. On fears the giant Escondido mine in Chile could be hit by further industrial unrest. The main union at the BHP-operated mine fired the starting gun on the latest round of wage talks last week when they presented contract demands to management. They are demanding a signing bonus of around $34,000 per worker, or 4 per cent of the dividends paid by Escondido to its shareholders BHP and Rio Tinto in 2017. That would represent the biggest one-off payment ever made by a Chilean mining company, according to local media reports. On top of that, the union has also requested a 5 per cent increase in salaries, citing among other factors the increase in copper prices. The union represents around 2,500 workers at Escondido, which is the world s biggest copper mine, accounting for around 5 per cent of global supply.
BULLION GOLD For the 24 hours to 23:00 GMT, Gold rose 0.42% against the USD and closed at USD1358.60 per ounce, as weakness in the greenback, boosted demand for the precious yellow metal. In the Asian session, at GMT0300, the pair is trading at 1358.40, with gold trading marginally lower against the USD from yesterday s close, as trade tensions between the US and China faded. The pair is expected to find support at 1351.13, and a fall through could take it to the next support level of 1343.87. The pair is expected to find its first resistance at 1363.73, and a rise through could take it to the next resistance level of 1369.07. The yellow metal is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average. Gold is expected to find support at [1314.50-30214] and a fall through could take it to the next support level of [1299.90-30020] Gold is expected to find its first resistance at [1350.10-30765] and a rise through could take it to the next resistance level of [1371.20-31122] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 GOLD COMMEX USD/OZ 1299.90 1314.50 1350.10 1371.20 GOLD MCX RS/10 GM 30020 30214 30765 31122
SILVER For the 24 hours to 23:00 GMT, Silver rose 0.75% against the USD and closed at USD16.71 per ounce, tracking gains in gold prices. In the Asian session, at GMT0300, the pair is trading at 16.73, with silver trading 0.09% higher against the USD from yesterday s close. The pair is expected to find support at 16.57, and a fall through could take it to the next support level of 16.41. The pair is expected to find its first resistance at 16.84, and a rise through could take it to the next resistance level of 16.95. The white metal is trading above its 20 Hr and 50 Hr moving averages. Silver is expected to find support at [16.14-37941] and a fall through could take it to the next support level of [15.87-37560] Silver is expected to find its first resistance at [16.73-38942] and a rise through could take it to the next resistance level of [17.05-39562] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 SILVER COMMEX USD/OZ 15.87 16.14 16.73 17.05 SILVER MCX RS/KG 37560 37941 38942 39562
ENERGIES CRUDE OIL For the 24 hours to 23:00 GMT, Crude Oil declined 0.68% against the USD and closed at USD65.64 per barrel, surrendering its previous session gains. In the Asian session, at GMT0300, the pair is trading at 65.73, with oil trading 0.14% higher against the USD from yesterday's close, on Middle East tensions. The pair is expected to find support at 65.17, and a fall through could take it to the next support level of 64.61. The pair is expected to find its first resistance at 66.2, and a rise through could take it to the next resistance level of 66.67. Crude oil is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average. Crude oil is expected to find support at [63.79-4157] and a fall through could take it to the next support level of [62.41-4081] Crude oil is expected to find its first resistance at [66.47-4307] and a rise through could take it to the next resistance level of [67.77-4381] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 CRUDE OIL COMMEX USD/BBL 62.41 63.79 66.47 67.77 CRUDE OIL MCX INR/BBL 4081 4157 4307 4381
NATURAL GAS Natural gas futures started the week under pressure and headed into its lowest level since February 12, but buyers came in on March 26 to stop the price slide at $2.610, just slightly above its last main bottom at $2.600. The buying was strong enough to produce potentially bullish chart patterns on both the daily and weekly charts. May Natural Gas futures settled at $2.733, up 0.100 or 3.80%. The turnaround in the market was being credited to continued calls for cold temperatures across the northern U.S. for the first week of April. Natural gas is expected to find support at [2.63-170.60] and a fall through could take it to the next support level of [2.51-161.70] Natural gas is expected to find its first resistance at [3.82-184.40] and a rise through could take it to the next resistance level of [2.90-189.30] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 NATURAL GAS COMMEX USD/MMBTU 2.51 2.63 2.82 2.90 NATURAL GAS MCX INR/MMBTU 161.70 170.60 184.40 189.30
BASE METALS COPPER Among base metals, copper for May delivery was up 0.7% at $3.023 in late trade for a weekly gain of 1.21%, rebounding from Monday s threemonth lows of $2.938. Worries over recent weak economic data out of China, the world s largest copper consumer, and concerns over trade tensions had pressured prices to their weakest levels since December after they hit a nearly four-year high late last year. Copper is expected to find support at [2.96-428] and a fall through could take it to the next support level of [2.89-419.30] Copper is expected to find its first resistance at [3.08-442.50] and a rise through could take it to the next resistance level of [3.13-448.20] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 COPPER COMMEX Cents/Lb 2.89 2.96 3.08 3.13 COPPER MCX INR/Kg 419.30 428 442.50 448.20
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