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BULLION
The trend in silver futures for September delivery on
India's Multi Commodity Exchange (MCX) is bullish.
“For intra-day, support for the commodity is seen at
40940 and 40810 levels while resistance is seen at 41830
and 41999 levels,” said John Godson, Technical Analyst at
Commodity Online.
“The commodity is expected to witness selling
sentiments in the range between 41600 to 41700,” he
noted. MCX silver futures for September delivery was
seen trading up by 2.61% at Rs. 41550 per kilogram as of
06.21 PM IST on Wednesday.
Silver prices in the global market rose as European stocks
declined. However, steady US Dollar and concerns over
US Federal Reserve's monetary stimulus kept pressuring
on the white metal movement to certain extent.
Recent fall in gold and silver prices were the result of an
over-reaction from bond markets to Fed comments and
ultimately real interst rates will fall back from current
levels, making the situation positive for precious metals
in general, according to ETF Securities Ltd. In the near
term, further declines in gold prices can't be ruled out
but the fact that gold is trading 20% below its average
marginal cost of production, silver 10%, and platinum
25% below marginal production costs, prices will have to
move above these levels to support long term supply
growth, according to ETF Securities Ltd. "With gold
speculative shorts at all-time highs and market sentiment
almost unanimously negative, we believe there is scope
for a price reversal in the coming weeks and months.
MARKET NEWS
ENERGY
The trend in crude oil futures for July delivery on India's
Multi Commodity Exchange (MCX) looks bullish for the
day and traders are advised to stay on buy side.
“For intra-day, support for the commodity is seen at 6050
while resistance is seen at 6150.” “Traders may take buy
position above 6070 with the stop loss of 6050 for the
target near 6130 and above that 6150”. MCX crude oil
futures for July delivery was seen trading up by 03.14% at
Rs. 6115 per barrel as of 05.26 PM IST on Wednesday.
US Energy Information Administration (EIA) is scheduled
to release its weekly crude oil inventory data at 08.00 PM
IST today and the commodity may change its direction
after the data release. On Wednesday, crude oil prices in
the global market recorded an up-tick on a decline in US
crude oil stock-piles followed by political unrest in the
Middle East.
Crude oil prices were supported by the concerns that the
political unrest in Syria and Egypt may spread to the
other countries in the Middle East, there by destabilising
the crude oil supply from the region.
Political turmoil in Egypt has seen to it that WTI crude oil
futures have crossed the psychologically important mark
of $100/bbl. Protesters assembled at the legendary Tahrir
Square are demanding that Egyptian President Morsi
resign even as the army there has served an ultimatum
asking him to step down by Wednesday maximum. Also,
the data from American Petroleum Institute stated that
the US crude oil inventories dropped by 9.4 mn barrels
for the week through June 28.
BASE METAL
The industrial metals have exhibited subdued
sentiment over the past several trading sessions.
Copper, which was expected to hover in the range of $
3.25-3.5 per pound has been struggling hard to keep
its $3 levels. However, with supply concerns gripping
the international traders, copper prices recovered a
bit and traded above $ 3.14 in the futures trade on
Comex in New York on Wednesday. In this interview
with The Gold Report Stefan Ioannou of Haywood
Securities maintained that happened on the back of
Federal Reserve Chairman Ben Bernanke's hints that
quantitative easing in the United States may end in
mid-2014, raising concerns that U.S. demand for raw
goods will decline. Because copper goes into a lot of
raw goods, that supposes less demand.
Also, China being the largest consumer, has indicated
sings of slowdown in industrial production. In
addition, copper inventories are well over 600,000
tons, which is high on a historic basis.
China’s manufacturing numbers are weakening, which
may create stockpiles of copper, thereby further
pressurizing the prices. People are worried that China,
which really drives a lot of the metal stories, is not
growing as fast as expected.
Haywood Securities had forecast a copper price above
$3.60/pound ($3.60/lb) for the remainder of 2013. Six
months later, copper is struggling to remain above
$3/lb. The analyst firm, in early June lowered copper's
average price for 2013 to $3.35/lb. Year to date, the
average copper price is $3.43/lb.
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