Commoditytalk

NW18 : Weekly Gold Outlook

2010-07-27T10:33:00.000+05:30

NW18:Weekly Bullion Outlook: Dn on waning investment demand, weak charts
NewsWire18, Monday, Jul 26
.
By Shrikant Kuwalekar
MUMBAI - Domestic and international gold futures are likely to remain
subdued over the next 5-6 trading sessions as waning investment demand, and
weak technical charts are likely to pressurise the metal, analysts and
dealers said.
However, the extent of fall in domestic market may be limited by a grim
outlook on rupee against the dollar, they said.
"On MCX and ICEX, the most active August contracts have a minor support
around 18,200 rupees per 10 gm, breaking which, it will fall to 18,040 rupees
during the week," said Kamlesh Jogi, research analyst with Fortune Financial.
The contracts were today marginally in red around 18,240 rupees per 10 gm.
However, some news-based periodic bounce backs are possible in the yellow
metal prices, which, however, may not sustain due to lack of follow-up
investment buying in the gold, Jogi said.
"Despite recent fall in gold prices (from $1,266 an ounce to $1,185), we
haven't heard of revival in physical demand in Asia or the West. Even,
investment demand is also on the gradual decline," said Pooja Chhabria,
senior analyst with Ventura Commodities.
Gold holding with the world's largest gold-backed exchange traded fund,
SPDR GoldTrust, declined to 1,302 tn as on Friday, from a record high of
1,320.44 tn on Jun 30.
Last week, the fund registered largest weekly fall since January of over
12 tn.
This has been pressurising gold constantly, Chhabria said.
The ease in Eurozone problems, following better-than-expected results
from banks' stress tests and a few economic numbers from 16-nation group have
raised hopes that the continent may avoid second recession, which will be
negative for gold, she added.
An analyst with a city-based brokerage said that rising rate scenario in
some economies, such as Australia, Korea, Taiwan, Thailand and now likely in
India, have reasonably reduced the upside potential in gold, barring major
economic crisis-like situation in the coming days.
Both the analysts agree that on the technical charts, the world's
benchmark COMEX gold was heading for $1,175 an ounce, and a close below that
could take prices further down to $1,130-$1,145 zone.
"With expected fall of 1.0-1.5% in rupee-dollar rate, domestic gold
futures should hold 18,000 rupees per 10 gm level with further downside
possible to 17,880 rupees," the Mumbai-based analyst said.
Silver is likely to largely track the yellow metal. However, if the
current uptrend in base metal continues, the white metal can outperform gold
by wide margin, analysts said.
The most active September silver contracts on MCX and ICEX can trade in
28,600-29,500 rupees in the next 4-5 sessions, dealers said.
The contracts were trading today slightly down around 29,100 rupees a
kg. End
.
US$1 = 47.04 rupees
.
Edited by Sandeep Deshmukh
.
NewsWire18 Tel +91 (22) 6637-8700
Send comments to feedback@newswire18.com
.
Copyright NewsWire18 Ltd. 2007. All rights reserved.
Category : C/DRV C/MAR C/MET C/PRE C/GOL C/SIL C/OUT R/ASI R/IN R/S
<>cC/DRV,cC/MAR,cC/MET,cC/PRE,cC/GOL,cC/SIL,cC/OUT,
<>cR/ASI,cR/IN,cR/SHA,
story-number = 12477 - 26-07-2010
transmission-datetime = 7/26/2010 9:06:48 PM
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Budget - Bullion - USD/INR & Nifty

2010-02-26T12:00:00.000+05:30

BUDGET - BULLION -USD/INR & NIFTY
INDIAN Common Budget will give fresh direction to USD/INR, expected to remain strong. Create position accordingly. Major Support at 45.90 and resistance at 47.20. Gold will be trading on INR move and major policy change in Import duty. NIFTY have strong support at 4770 then 4650. Major resistance is seen at 4930 & 5050.

TRADE RECOMMENDATION

2010-02-24T11:18:00.000+05:30

MCX Crude Oil March –Buy at 3655 Target 3685 & 3715 SL 3632

MCX Nickel Feb – Buy at 922-20 Target 932 & 945 SL 914

USD/INR is looking strong for they day. Can buy spot in range of 46.40 Target 46.65 & 46.9 SL 46.22

Nifty Intraday looking strong. Overall Buy on a dips. Buy in range of 4852 Target 4895 & 4930 SL 4819

Gold may average below $1,000/oz in 2010

2010-02-22T21:16:00.001+05:30

Gold may average below $1,000/oz in 2010, and possibly as low as $950/oz, Although there remains huge uncertainty concerning the economic and financial markets, we feel the balance of probabilities favors an eventual resolution of economic imbalances, such that investor interest in gold and silver will gradually begin to unwind,

a steady economic recovery would lead to rising asset values and undermine demand for store-of-value assets with low yields such as gold. Adds, rising gold output, the IMF's plan to sell gold and much lower levels of producer hedge buybacks all make the fundamental outlook bearish.

TRADE RECOMMENDATION

2010-02-22T11:04:00.000+05:30

MCX Gold April – Buy at 16835 Target 16900 & 16940 SL 16780

MCX Nickel Feb –Buy at 943 Target 958 & 970 SL 932

Nifty Intraday looking strong. Overall Buy on a dips. Buy in range of 4885 Target 4925 & 4945 SL 4859

USD/INR is looking weak for they day. Can sell spot in range of 46.22 Target 46.00 & 45.85 SL 46.42

TRADE RECOMMENDATION

2010-02-18T10:56:00.002+05:30

MCX Gold April –Sell at 16590 Target 16520 & 16480 SL 16635

MCX Copper Feb – Sell at 326.5-27 Target 323 & 321 SL 329.8

Nifty Intraday looking strong. Overall Buy on a dips. Buy in range of 4885 Target 4925 & 4945 SL 4859

USD/INR is looking weak for they day. Can sell spot in range of 46.22 Target 46.00 & 45.85 SL 46.42

Copper -Book profit in buy call at 239 CMP 269.5

2009-07-23T21:14:00.002+05:30

Trader can book profit in range of 269-271 and wait for another buying opportunity at 254-252 range. wait for next report.

regards

Kamlesh Jogi

Report on 30 June 2009

http://commoditytalkonline.blogspot.com/2009/06/copper-short-term-outlook.html

Copper - Short Term outlook
MCX Copper Aug contract have shown lot of volatility while trading in range of 213 -257 in short duration of 1.5 month.

Technically opportunity can be seen for buying on dips where market have given 61.8% retracement from high of 257 to low of 213.Another opportunity arise if market breaks 229.9 levels where 61.8% retracement holds.

In weekly chart we can see a strong bullish rally where strong support comes around 229 ranges and resistance comes around 280 ranges. Weekly 13 days RSI still suggest a buying potential at 59.32 levels while MACD is holding in positive territory with increase in bullishness. Both indicators suggest a positional buying level on dips. Can be seen from chart given below:

Recommendation:

Positional - MCX Copper August: Buy at 242-238 range Target 280 & 304 SL 229

Or Sell below 229 Target 202 & 180 SL 244

Commodity Transation Tax has been removed . Details are awaited.

2009-07-06T12:20:00.000+05:30

Commodity Transation Tax has been removed . Details are awaited.

Copper - Short Term outlook

2009-06-30T17:14:00.003+05:30

MCX Copper Aug contract have shown lot of volatility while trading in range of 213 -257 in short duration of 1.5 month.

Technically opportunity can be seen for buying on dips where market have given 61.8% retracement from high of 257 to low of 213.Another opportunity arise if market breaks 229.9 levels where 61.8% retracement holds.

In weekly chart we can see a strong bullish rally where strong support comes around 229 ranges and resistance comes around 280 ranges. Weekly 13 days RSI still suggest a buying potential at 59.32 levels while MACD is holding in positive territory with increase in bullishness. Both indicators suggest a positional buying level on dips. Can be seen from chart given below:

Recommendation:

Positional - MCX Copper August: Buy at 242-238 range Target 280 & 304 SL 229

Or Sell below 229 Target 202 & 180 SL 244

Spot Gold -technical analysis

2009-05-19T16:07:00.002+05:30

Spot Gold - Technical Analysis

Gold

Support: 916.00, 912.00, 907.00, 902.00, 896.00

Resistance: 925.00, 927.00, 930.00, 935.00, 940.00

Trend : Buy on DIPS. Positive.

Silver

Support: 13.76, 13.66, 13.55, 13.43, 13.35

Resistance: 13.88, 13.96, 14.08, 14.25, 14.42

Trend : Buy on DIPS. Positive

Crude Oil given triangel brekout, may correct till 2356

2009-04-21T18:19:00.001+05:30

Crude Oil given triangel brekout, may correct till 2356

Technically Copper may correct till 209

2009-04-21T18:15:00.002+05:30

Technically MCX Copper April may correct till 209

Spot Gold forming double bottom in daily chart!

2009-04-21T18:12:00.001+05:30

Spot Gold forming double bottom in daily chart.

Gold Price Should Benefit From China's Call For a New Reserve Currency

2009-03-25T18:37:00.000+05:30

Gold Price Should Benefit From China's Call For a New Reserve Currency

Gold price continues to trade around 920 with a soft tone in European morning. Investors have shifted the focus from the Fed's inflationary asset buying program announced last week to the Treasury's PPIP.

The G20 will be meeting next week. Earlier this week, the Chinese Government called for creating a new currency in replacement of the USD as a reserve currency. We believe the topic will be one of the main focuses in the summit and if the proposal gains support, gold will be an immediate beneficiary.

The Chinese central bank (PBOC) urged the IMF to be responsible for creating a 'super-sovereign reserve currency', a new currency which is free from inherent risks of credit-based currency and facilitates global liquidity. China, which possesses the world's largest reserve in USD ($740B), once again showed explicit concerns on USD.

A central bank advisor said today that China has suffered badly from the dollar's role as a global standard. 2 weeks ago, Premier Wen Jiabao asked the US to 'guarantee the safety of China's asset.

Basemetals - Latest fundamentals update

2009-03-18T19:28:00.000+05:30

News Copper - The global copper market was in a 329,000 metric tons surplus in 2008, data from the World Bureau of Metal Statistics showed Wednesday. That compares with a deficit of 119,000 tons in 2007, WBMS said. Global consumption in January to December 2008 was 18.16 million tons, fractionally higher than the same period of the previous year.
Mine production for the year was at 15.53 million tons, 0.7% lower than in January to December 2007 period, WBMS said. Meanwhile, refined copper production rose by 2.8% on the year to 18.48 million tons in 2008.

News Zinc : The global refined zinc market was in a surplus of 185,000 metric tons in 2008, the World Bureau of Metals Statistics said Wednesday. World refined zinc output rose 169,000 tons in 2008 to 10.531 million tons,the WBMS said. World refined zinc demand increased by 28,000 tons to 10.346 million tons. World zinc mine production was 8.7% higher at 12.07 million tons.

News Lead : The global lead market was in a nearly 3,000 metric ton surplus in 2008, data from the World Bureau of Metal Statistics showed Wednesday. That compares with a 203,000 ton deficit in 2007, the WBMS said. Lead mine production totaled 3.884 million tons in 2008, with Chinese output dominating the global supply. Refined production from both primary and secondary sources was up 6.1% in 2008 on the year, WBMS said. Global demand was 3.5% higher in 2008 on the year to total 8.668 million tons.

News Nickel : The global refined nickel market was in a 54,100 metric ton surplus in 2008, the World Bureau of Metal Statistics said Wednesday. World refined nickel production fell 5.9% to 1.369 million tons, the WBMS said World refined nickel demand declined 2.8% to 1.315 million tons. World nickel mine output increased by 1.3% to 1.5379 million tons.

LME copper is leading the base metal complex

2009-03-13T16:32:00.001+05:30

LME copper is leading the base metal complex up, trading higher due to a combination of technical indicators and some fresh positions being added, copper remains in a range between $3,300 (MCX Rs.170/ Kg) a metric ton to $3,800/ton (MCX Rs. 195/Kg).

Given copper held above support at $3,500/ (MCX Rs. 180 /Kg)ton it could post further gains. if copper trades above $3,800/ton it could then target $4,400/(MCX Rs. 226/ Kg)ton. (INR = 51.60)

Reasons for gold's recent rally:

2009-02-23T18:28:00.002+05:30

Reasons for gold's recent rally:

1. Safe-haven. Since the collapse of Lehman Brothers in September 2008, systematic risks of financial systems have emerged. Although Governments all over the world have pledged numerous bailout plans and nationalizations of financial institutions, investors probably lost confidence in it. Rather than putting money in equities, fixed income products or even in savings deposit account, they preferred some hard assets which offered store of values. Demand for gold coins evidenced investors' seek for safe haven as gold coins are portable but trading as a premium to gold bars. Normally, gold coins trade at a 5% premium but since 2H08, some 10% premiums were being paid. In the US and the Western European, demand increased significantly.

2. Long-term Inflation. The cost of bailouts, nationalizations and decline in tax revenue increased the risk of long-term inflation. Although recent inflation reports were weaker than expected and many analysts talked about deflation, investors have started to worry about inflation in the long run. US yields indicated that inflation expectations have increased over the past few months. The spread between 10-year T-notes and TIPS rose to 1.15%, compared with -0.08% in November and 6-month average of 0.95%.

3. Increase in default in sovereign debts. In the past, economists and investors seldom paid much attention to sovereign credit-default swaps. However, after the bankruptcy of Lehman Brothers, credit markets started to tighten. Capital injections to large financial institutions have put sovereign debts at risk. Investors now use CDS spread to predict movements of currency pairs. For instance, previous decline in British pound was accompanied with rapid rise in CDS of Britain sovereign debt. The Japanese yen fell sharply last week, the CDS of its sovereign debt also rose markedly as Japan recorded a decline of 12.7% yoy in 4Q08 GDP.

Spot Gold Technicals

2009-02-19T17:47:00.002+05:30

Spot Gold - If breaks 989 can go as high as 1036 -1085 levels, If not tehn possibility of a heavy correction.

refer given chart below :(Source -MKumar )

Spot Gold highest since July

2009-02-17T18:17:00.001+05:30

Spot gold is trading at its highest since July last year amid further banking concerns that sparked investors to swap euro for gold. East European banks were at risk of default, considering the rapid economic decline in that region.

Momentum is going to push gold prices higher with financial market uncertainty driving investors to the precious metal, bearish sentiment in the market over equities, financial market uncertainty "back in play" was likely to mean more buying into gold.

Gold got an additional boost higher after Russia's central bank confirmed it had been buying gold, with gold's share in its reserves growing by about $1 billion to $15.5 billion during January, This combination has triggered another move in gold, taking the metal to the highs for the year and seems set to make further gains.

Technically gold is expected to trade higher after it traded above $936.3/oz last week, the next significant target higher is at $989.6/oz and then $1,000/oz and then $1,033.9/oz, Options were bought in Asia for gold at $1,000/oz and $1,050/oz, which indicates the momentum and expectation is for gold to move higher.

MCX Copper : If close above 166, may trade higher till 180

2009-02-05T16:02:00.002+05:30

MCX Copper may create high till 180, if close above 166 today.

refer chart given below.

regards ,

Kamlesh Jogi

Mail : kamleshjogi@gmail.com

Spot Gold Daily Technical Outlook

2009-01-30T18:47:00.002+05:30

Spot Gold Daily Technical Outlook

Gold's rally resumes after drawing support and reaches as high as 926.6 so far today. At this point, further rise is still expected as long as 874.20 support holds. Next target will be key near term resistance at 936.3. Decisive break there will confirm the medium term bullish case and bring stronger rise to 1000 psychological resistance again. Though, failure below 936.3 and a break of 874.20 support will be the first alert that Gold has topped out and will turn short term outlook neutral first.

MCX Gold may take correction if doesnt break 14500

2009-01-30T16:01:00.002+05:30

Trading at major resistance at 14450-14500, may take correction till 13200,
If breaks 14500 may create new high till 14700

Regards ,

Kamlesh Jogi

Mail : kamleshjogi@gmail.com

BSE INDEX - Technicals

2009-01-29T15:48:00.003+05:30

Bse Index is having a short term uptrend and market will confirm more bullish trend if close above 9340, next major resistance is seen at 9707, 10103 & 10344. Major support can be seen at 9052, 8749 and 8461.

Regards ,

Kamlesh Jogi

Mail - kamleshjogi@gmail.com

MCX CRUDE OIL FEB : BUY ON DIPS WITH STOP AT 1943, TARGET 2183

2009-01-29T14:24:00.001+05:30

MCX CRUDE OIL FEB : BUY ON DIPS WITH STOP AT 1943, TARGET 2183

SPOT GOLD - TARGETTING $1035 AGAIN.

2009-01-28T13:58:00.002+05:30

Copper under pressure

2009-01-20T15:34:00.002+05:30

LME copper under pressure from a strengthening dollar, rising inventories and falling crude oil prices, new short positions may be taken with a downside target of $3,000/ton, worries about banking industry are also raising risk aversion, which is negative for commodities. While the EUR/USD may not break through the December lows, it's likely to slide in the short-term, keeping pressure on commodities.

LME 3-month copper at $3,315/ton, down $110.The 20- and 30-day moving averages are in the mid- to high-$3,100s, making them the next immediate support levels.

MCX Copper Daily Chart -

MCX Copper is trading on major support at 157 and if breaks can test next level of 144 & 138. Short term resistance can be seen at 169.55, if sustains above can show some bullishness till next major resistance at 174.80

Gold will play major role in 2009

2009-01-02T18:25:00.001+05:30

Gold will play major role in 2009

Gold will likely trade in a wide range during 2009, possibly from the $600s to above $1,000 an ounce, but political and economic circumstances will determine whether the metal will continue to outpace other commodities and equities.

Gold is often seen as a haven during times of political and financial uncertainty, and that safe-haven status helped the metal maintain its value even as other assets tanked this year.

Next year, the metal's range is likely to be dictated by in part by inflation expectations and currency movements.

In 2008, front month gold in New York gained roughly 5%, while nearby crude and copper lost more than half their value. The Dow Jones Industrial Average lopped off more than 30%. After dropping like a stone on waning auto demand, platinum futures earlier this month settled below the yellow metal for the first time since the 1990s.

Gold may touch $630 on the low side and $980 on the high side in 2009, with an
average price near $810, The metal's trading range will likely stay as wide as this year's $350, with volatility remaining "an integral part of daily, weekly and monthly swings.

Wild cards include severe deflation or "catastrophic geopolitical developments," which could widen that range by $100 on either side, Standard Chartered Bank is more bullish, expecting gold to average $985 in 2009, with a retest of $1,000 by the end of the second quarter.

Gold has outperformed the commodity complex through the financial-sector crisis, and we believe it will continue to perform well through the economic downturn, given constrained supply and continued, if volatile, investment demand, the bank said in a research report.

The metal has risen since November on support from U.S. dollar weakness and, this week, tensions in the Middle East, Standard Chartered said. "In the context of a weakening U.S. dollar we believe fresh investment flows will outweigh withdrawal of previous safe haven flows" as market deleveraging ends and risk appetite increases, Standard Chartered said.

However, Sterling Smith, vice president with FuturesOne, sees equities outperforming gold on balance next year.

The bears are winning right now" in gold, he said, forecasting an average gold price of $720. The metal may try to make an early test to around $955, but a failure to hold that level "could start a serious liquidation that could give us a low down to the $600 area.

Inflation fears cropping up later in 2009 perhaps tied to some sort of currency issue could push gold back into the $820 area toward 2009's end, Inflationary pressures to the upside in the second half of 2009 could have other commodities bottoming and then playing catch up with gold, even though the metal may continue rising.

But during the first half of the year, Gross sees gold continuing to outperform equities and other commodities as the demand side pressures physical resources and gold's safe-haven play continues.

Historical 2008 : US Economy at it worst

2009-01-02T18:13:00.000+05:30

Historical 2008 : US Economy at it worst

This was the worst year for equities and many other investments since the depths of the Great Depression. The Dow Jones Industrial Average fell 34% in 2008, its biggest loss since 1931. The biggest loser on the blue-chip index for the year was General Motors Corp. (GM), which fell more than 87% to $3.20 and needed an emergency loan from the government just to make it to 2009.

The next biggest loser was Citigroup (C), one of the world's biggest banks by assets that also required a government rescue late in the year. Citi fell about 77% to $6.71, weighed down by the same load that sunk Lehman Brothers Holdings and effectively brought down Bear Stearns: billions of dollars of bonds linked to mortgages.

The broader Standard & Poor's 500 ended the year down 38%, also the largest loss since 1931, as the financial crisis spilled into the broader economy. The technology-oriented Nasdaq Composite shed 40.5%, the worst performance in a history dating back to 1971, edging out the 39% loss in 2000, when the tech bubble burst.

Bad loans and a string of banking failures resulted in the financial sector being the weakest of the S&P 500, losing 58% in 2008.

That was the day the government allowed Lehman Brothers Holdings to fail. The bankruptcy sent shock waves through the financial system, causing the credit crunch to become a full-fledged dollar drought. Corporations could not borrow the money they needed to make payrolls or invest in projects. Ultimately, consumers slowed spending over job and housing worries.

The combination of the credit crunch and consumer-spending slowdown sent companies as diverse as chicken processor Pilgrim's Pride (PGPDQ) and electronics chain Circuit City (CCTYQ) to bankruptcy court.

Defaults rose, and yields in the bond market reached record levels. In early December, risk premiums that investors charge on risky corporate bonds, or junk bonds, topped 20 percentage points over benchmark U.S. Treasury rates, according to Merrill Lynch's closely watched High Yield Master II Index. The number implied a default rate of around 22% over the next year, according to market watchers, higher than the realized record of 15.4% in 1933, the depths of the Great Depression.

At the start of 2008, the two-year yield was a bit below 3%. It dropped to a historic low of 0.569% in December and closed out the year around 0.75%. Treasurys earned 14.59% year to date as of Tuesday, according to Barclays Capital U.S. Treasuries Index. This year represents Treasurys' best year since 1995, as measured by the index.

In another sign of risk aversion, the commodities bubble burst this year. Inflation expectations had drawn speculators in hedge funds and elsewhere to commodities futures and stocks, sending oil to a peak of $147 a barrel. Fears that a worldwide recession would reach the shores of even fast-growing nations like China caused oil to turn around. The flight of the hedge funds, forced by the financial crisis to sell investments they had made on borrowed money, exacerbated the crash for oil and other commodities.

The materials sector was the second weakest in the S&P 500, losing about 48%, while energy stocks declined 37%. None of the 10 sectors in the S&P 500 recorded gains on the year. The one that fell the least was consumer staples, off roughly 18%. Investors found some consolation in stocks that specialize in serving consumers when money is tight. McDonald's Corp. (MCD) added 45 cents, or 0.7%, to $62.19, and gained 5.6% on the year; Wal-Mart Stores Inc. (WMT) added $1.01, or 1.8%, to $56.06, up 18% for 2008. Family Dollar Stores Inc. (FDO) rose 56 cents, or 2.2%, to $26.07, and rose 36% this year.

Some of those who were bears going into 2008 remain bears for 2009. One was not convinced that government bailouts alone can save an economy, or a market.

Crude Oil and USD fundamentlas

2008-12-10T17:51:00.001+05:30

Crude Oil

Bullish factors for crude oil prices yesterday included
(1) the decline in the dollar index to a 1-week low,
(2) comments from Libya's top oil official that OPEC should make "substantial" output cuts when it meets next week,
(3) the rally in global equity markets, and
(4) speculation that President-elect Obama's pledge to create the biggest US public works program in 50 years will increase energy demand.

The main bearish factor for crude oil prices yesterday was continued concern about the weakening global economy, which should curtail overall crude oil demand.

US Dollar

Bearish factors for the dollar yesterday included
(1) reduced flight-to-safety demand into the dollar as global equity markets rallied, and
(2) President-elect Obama's talk of more fiscal stimulus and his pledge for a mammoth US infrasructure spending plan, which could ease the global credit crisis and thus reduce demand for dollars.

Bullish factors for the dollar yesterday included
(1) the prediction by Deutsche Bank AG that the ECB will cut its benchmark lending rate to 0.75% by the middle of next year as the European economic situation continues to deteriorate,
(2) the larger-than-expected decline of -3.8% y/y in Oct German industrial production, which was the largest y/y decline in 6-1/2 ye ars, and
(3) the larger-than-expected fall in the Dec Euro-Zone Sentix investor confidence to its lowest level since the data series began in July 2002.

Crude Oil - Important fundamentlas factors

2008-12-01T18:33:00.000+05:30

Bearish factors include OPEC's decision over the weekend to wait until its December 17 meeting to decide whether to cut production another notch. OPEC called on non-OPEC producers such as Russia, Norway and Mexico to help with a production cut and to underpin crude oil prices.

Jan crude oil prices last Friday closed -1 cent at $54.43 and Jan gasoline prices closed +0.88 cents at 120.96 cents.

Bullish factors last week included

(1) the sharp rally in global stocks, which reduced pessimism about the global economy,

(2) the likelihood for an eventual OPEC production cut, and

(3) some short-covering after crude oil prices were able to stabilize for a week.

Bearish factors included

(1) OPEC's dithering over a production cut,

(2) OPEC President Khelil's comment that some OPEC countries can't find buyers for all their oil, and

(3) continued exp ectations for weak global economic growth and fuel demand.

US Consumer spending fell, durable orders down

2008-11-26T19:21:00.001+05:30

Consumer spending fell 1% in October, the largest decline since September 2001, the Commerce Department reported Wednesday. The result matched analysts' expectations. Real consumer spending fell 0.5%. Personal income rose 0.3% in October after a 0.1% gain in September. Analysts were looking for a 0.1% income gain for October. Real disposable income rose 1% in October. As expected by analysts, the core personal consumption expenditure price index was unchanged in October. This index gained 0.2% in September, and is up 2.1% in the past year.

Orders for U.S.-made durable goods fell 6.2% in October, the largest decline in two years, the Commerce Department estimated Wednesday, as orders for transportation goods fell 11.1%. Economists surveyed by MarketWatch had expected an overall decline of 2.5%. Excluding transportation, orders fell 4.4%. Orders for core capital equipment - the kind of investments businesses make to expand or update their productive capacity - fell 4% in October, after a 3.3% decline in September. October shipments fell 2.4% after a 0.2% dip in September. Excluding transportation, shipments fell 1.7% in October after a 0.9% decline in September. New orders for September were revised to a decline of 0.2%, compared with the prior estimate of a 0.9% gain

U.S. Q3 GDP revised down to - 0.5%

2008-11-25T19:12:00.001+05:30

The U.S. economy contracted at a 0.5% annual rate in the third quarter, slower than the negative 0.3% estimated a month ago, the Commerce Department reported Tuesday.

The revisions to real gross domestic product were largely due to weaker consumer spending. Economists were predicting a revision to about negative 0.6%.

The core personal consumption expenditure price index rose 2.6%, compared with the initial estimate of a 2.9% gain.

Fundamentlas for Crude Oil

2008-11-25T18:56:00.000+05:30

Bullish factors for crude oil prices yesterday included

(1) the drop in the dollar index to a 1-1/2 week low,

(2) the sharp rally in US and European stock markets,

(3) the announcement by the Chinese of their second stimulus package in the last two weeks, potentially increasing energy demand, and

(4) comments from oil ministers from Iran and Venezuela that OPEC must cut production again after last month's cut failed to buoy prices.

Bearish factors for crude oil prices yesterday included continuing weak global economic data with

(1) the weaker-than-expected US existing home sales for Oct, and

(2) the larger-than-expected fall in the Nov German IFO business sentiment to a 15-3/4 year low .

MCX Copper - Technical Outlook

2008-10-30T18:19:00.003+05:30

MCX Copper traded volatile during last 6 month where market has registered high of 387.30 and low of 188.50. Market was mainly influenced by a slow down in US Markets and decrease in China demand. While continuous increase in LME inventory also supported the move.

Technically speaking market is still under pressure unless a clear break out of 27 days EMA of 242.27, a bullish trend will be back only if market able to break 100days EMA of 291.60., RSI suggests in-decision territory as current 13 days RSI is 42.20.

MCX Copper is having major support at 211, 199.68, 183.36, while short term resistance can be seen at 235.73, 252.47, and 263.64.

Trade Recommendation –
MCX Copper Nov: Short term traders can buy on dips around 220 with stop loss of 211 Target 235 & 246
Traders looking for long term trades can wait till bounce of 240-246 range can sell there with stop loss of 265 for target of 203 & 184

Regards ,

Kamlesh Jogi

Commodities Research Analyst.

Fed may cut interest rate in oct metting, chances are 80%

2008-09-27T09:11:00.002+05:30

Conditions within the US financial markets continued to dominate investor sentiment and currency trends for much of the week. The increasing mood of uncertainty contributed to choppy trading conditions and also made it difficult to secure a decisive trend.

Following the announcement late last week, the Treasury continued to push for congressional agreement over a US$700bn support package for the financial sector.
Political tensions increased later in the week with President Bush stark in his warnings over the severe negative impact if an agreement was not reached.

Money-market tensions remained extreme and global central banks aggressively provided liquidity to help ease these strains and allow markets to function.

Congressional leaders looked to be near a framework agreement on Thursday, but there were then fresh tensions as a group of Republicans looked to promote an alternative package amid acrimonious talks. There was no resolution by early on Friday.

Fed Chairman Bernanke was generally downbeat over the economic prospects and more pessimistic than in recent comments. He stated that growth would be likely to be substantially below potential over the second half of 2008. Market stresses could be a considerable drag while commercial real-estate loan conditions had tightened substantially. Bernanke also stated that recent inflation news had been slightly more favourable.

There were only limited US data releases over the first half of the week. The pace of releases then picked up and had a generally weak tone. Existing home sales dipped slightly to an annual rate of 4.91mn from 5.02mn the previous month while prices were lower. The latest national survey also recorded a further decline in house prices.

The was a sharp 4.5% decline in durable goods orders for August while initial jobless claims continued to increase to 493,000 in the latest week. Although there may have been distortions from hurricanes, the evidence suggested an underlying deterioration.

In view of the depressed data releases, markets moved to price in at least an 80% chance of an interest rate cut at the October FOMC meeting.

Author - Kamlesh Jogi (Commodities Research Analyst)
Mail : kamleshjogi@gmail.com

International Spot Gold - Technical View

2008-09-27T09:02:00.003+05:30

International Spot Gold – Technical View

International Spot Gold is trading in a vide range of $765 to $959 from last many weeks, where we have a large volatility and witnessed biggest single day movement.

Now market may see some consolidation where short term trades can be executed with tight stop loss as major support and resistance will play a critical role.

Spot Gold - Weekly Chart

Spot Gold weekly chart is showing major support in range of $857, $833 and $785. While major resistance can be noticed in range of $902, $926 and $959.

Technically speaking momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastic have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bulls. MACD is heading upwards in positive region, showing increase in bullish momentum. The 13-day RSI over 70 indicates the market is approaching overbought levels. It is a mildly bearish indicator. Current Spot Gold RSI is 51.15; hence market may show more bullishness.

Recommendation: Trader can enter with long position in range of $860-$855, Stop loss –break below $833, Target $900 , $924 and $955

Author - Kamlesh Jogi (Commodities Research Analyst)
Mail : kamleshjogi@gmail.com

Crude futures fell below $114 per barrel

2008-08-11T23:30:00.002+05:30

Crude futures fell below $114 per barrel in New York Monday afternoon, with the September contract down $1.66 at $113.60. Prices haven't traded this low since early May. Oil had climbed as high as $116.90 on Globex with the military conflict between Georgia and Russia raising concerns over a disruption in energy supplies. But concern over contracting demand, the result of a slowing global economy, has motivated sellers.

MCX Crude oil dropped to a fresh low of 4745, and closed at 4765 with a net loss of Rs. 74 per barrel, intraday high registered at 4919.

Spot Gold – Weekly Technical Outlook : August 4, 2008

2008-08-03T20:57:00.003+05:30

Spot Gold – Weekly Technical Outlook : August 4, 2008

International spot gold have shown erratic movement in last 2 weeks, where market have registered two weeks high of $988, then registered low of $916, turning all indicator bearish.

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. We can Cleary see a bounce back momentum. Nearest retrenchment level can be seen near first resistance on $944.

The daily stochastic have crossed over down which is a bearish indication. The stochastic indicators are increasing from oversold level, which is bearish and should support higher price.

The market's short-term trend is negative as the close remains below the 9-day EMA ($919.55), 27-day EMA ($925.55), 50-day EMA ($920.63),The upside closing price reversal on the daily chart is somewhat positive. Market still looking supportive for long term as market remains above 100-day EMA ($909.95), and 200-day EMA ($874.95).

International Spot Gold Daily Chart:

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 900.00 levels. If broken can see further fall to $872.00 and $828.00 , If market holds above $944.00 further rally can be seen towards $972.00 and $1016.00

Recommendation:

As market have given a recent fall can show some correction upside till $925, trader can wait unless market break this level, if market again come down from this level and break $919 range; can sell with a stop loss of $948 for the target of $903, $876 and $860 .Short term bearish ness can be seen if Crude oil prices continue down trend and Dollar remains strong.

Regards and Thanks

Kamlesh Jogi
Commodities Research Analyst.

Strong US dollar negative for Bullion and Metals

2008-08-01T00:04:00.001+05:30

Dollar retreats further against most major currencies in early US session Q2 GDP missed expectation and grew at 1.9% annualized rate. GDP price index was rose much less than expected at 1.1%.

Personal consumption grew 1.5% while PCE core was also below expecting, growing 2.1%. Jobless claims released today surged sharply to 448k,
adding more pressure to the greenback. Though, better than expected Chicago PMI is providing some support to the greenback.

Impact: A Strong dollar is always negative for bullion and metal prices, while weakness in energy is supporting the down move.

Regards,

Kamlesh Jogi

Commodities Research Analyst

Bullion afftected by weaknes in crdue and recovery in US Dollar

2008-07-17T13:02:00.001+05:30

Bullion may get pressure due to strong dollar and weakness in crude oil, major dips can be used as buying opportunities.

Strong Dollar:

Dollar fought back yesterday on the back of strong rally in the stock markets, pullback in oil prices, and a stronger than expected CPI reading but the momentum is so far mild. Fed minutes might sound a bit more hawkish than Bernanke's testimony, noting that some committee members said that some firming in policy would be appropriate very soon? to fight inflation. Nevertheless, markets are not that convinced yet with interest rates futures showing 41% chance of a hike by Dec, down from 44% a week ago.

Weakness in Crude Oil

Oil prices plunged four dollars on Wednesday, extending this week's spectacular losses after a surprise jump in crude reserves in the United States, traders said. Prices had already tumbled Tuesday in the biggest fall in 17 years amid rising concerns about sluggish US economic growth that could dampen global demand for crude oil. Prices fell on news of a build in US crude oil reserves. The US Energy Information Administration said inventories rose by 3.0 million barrels to 296.9 million barrels in the week ending July 11, confounding market expectations of a decline of 2.2 million barrels. However, the decline in oil prices from last Friday's record high levels above 147 dollars may be short-lived, analysts said, noting that the increase in US energy stockpiles reflected slowing demand in a sluggish US economy, the world's largest energy consumer. According to the US government, Americans consumption of petroleum products fell two percent over the past four weeks, compared with the same period a year ago.A sudden shift in US diplomatic policy toward Iran announced late Tuesday also eased oil supply concerns, analysts said.

Impact and Analysis:

Bullion getting pressure from both news and may push more down if crude oil retreats, but these drops always can use for buying as bullions are still very bullish for longer term can break all time high in international markets.

Regards

Kamlesh Jogi

Commodities Research Analyst

Alert::Crude Oil loosing strength may push gold-SIlver and Copper down.

2008-07-09T14:28:00.003+05:30

Crude-oil futures tumbled more than $5 a barrel Tuesday, suffering the biggest daily loss in nearly four months, as the rising dollar and economic worries spurred a broad sell-off in commodities for a second straight day.

Crude oil for August delivery closed at $136.04 a barrel on the New York Mercantile Exchange, down 3.8%, or $5.33, the biggest one-day loss in value since March 19. Earlier it slumped $6.23 to an intraday low of $135.14 a barrel.

Crude has lost $9.25 over the past two sessions.

Impact : Crude Oil prices are major indicator for other commodites and having main impact on Bullion and Metals prcies. If this fall continue and market breaks major support, we can more fall in Gold - Silver and Copper prices.

Regards ,

Kamlesh Jogi

ECB hikes key rate to 4.25%

2008-07-03T18:07:00.001+05:30

The European Central Bank on Thursday made good on a threat to hike its key interest rate for the first time in 13 months in a bid to tamp down inflation expectations.

The ECB announced it had boosted its key lending rate by 25 basis points, or a quarter of a percentage point, to 4.25%. Attention turns now to ECB President Jean-Claude Trichet's monthly news conference at 8:30 a.m. Eastern.
The move came after Trichet repeatedly sounded warnings that commodity-led inflation pressures raised the danger of feeding a wage-price spiral.
Markets currently see strong odds the ECB will hike rates twice more within a year, a scenario some economists see as unlikely given darkening growth prospects for the euro zone.

Trichet, however, is likely to maintain a hawkish tone in the news conference, said Juergen Michels, a European economist at Citigroup, underlining market expectations for further tightening of monetary policy.

The rate hike comes as the ECB and other central banks grapple with the monetary-policy dilemma posed by surging inflation pressures and a slowing economy.

Imapct ; Data is slightly positive for Euro region and will support Bullions and Meatls prcies in india as well.

Regards ,

Kamlesh Jogi

MCX Copper August is expected to take correction

2008-07-01T10:06:00.002+05:30

Mcx Copper August is expected to take correction in coming days, where market gave a rally from 331 levels to a high of 369.20. RSI is above 70 levle is indicating an overbought market. Market can fall towards the low of 360.40 and on the break of it can touch next level of 355 and 350.50. If market sustains below 350.50 then only further down fall can be seen. Short term strong resistance is seen near 376.70, on the break of it can test next level of 393 and 416.70

Recommendation - MCX Copper August : Sell at 368-369 Target 362 and 357 Stop Loss at 377

Weekly Spot Gold Technical Outlook : Kamlesh Jogi

2008-06-28T10:29:00.004+05:30

Sudden rise in Crude Oil prices and weaker dollar is supporting this bullishness in Spot Gold. Spot gold registered weekly high near 931.90 which is +$65.20 from last weeks low. Low registered this week is 874.10. Spot gold finished its weekly bullish move near 929.80, bit higher then 9 days moving average of 903.11

Technically Gold have turned bullish on the break of short-term resistance of 909 which will act as a initial support now. Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bulls. MACD is heading up wards in positive region, showing increase in bullish momentum.

The 13-day RSI over 70 indicates the market is approaching overbought levels. It is a mildly bearish indicator. Current 13 Days RSI is 63.008, which still supporting bulls.

Next support below initial support of 909 is seen at 895 and 873 while long term support still there in range of 857-848 ranges.

As market have broken previous resistance of 909 and 917, Next major resistance is seen near 935, if breaks and sustains above it will turn into next level of 954 and 977. Strong resistance is seen near 977.

Regrds,

Kamlesh Jogi

Commodity research Analyst

Crude Oil Inventory - Impact and Analysis

2008-06-26T10:22:00.000+05:30

Crude supplies climbed by 800,000 barrels to 301.8 million for the week ended June 20, according to the Energy Department Wednesday. They had fallen a total of nearly 25 million in the last five weeks. Motor gasoline supplies fell 100,000 barrels to 208.8 million barrels.
Distillate stocks were up 2.8 million barrels at 119.4 million barrels. Refinery utilization was at 88.6% compared with 89.3% of capacity a week earlier. Following the news, August crude was last down $2 at $135 a barrel in New York.

Impact & Analysis

Market already registered a fall of more then $3 per barrel in NYMEX Crude Oil futures; a fresh buying can emerge as speculative buyers are still there in market. Technically these levels are good for buying.

Regards,

Kamlesh Jogi

Commodity Analyst

Fed keep interest rate unchanged; impact and analysis

2008-06-26T10:19:00.001+05:30

The Federal Reserve closed the door on a series of rapid rate hikes but opened the window a crack for rate hikes down the road.

In a statement released after the Fed held its target for short-term interest rates steady at 2%, the central bank sharpened its focus on inflation, saying that the risks posed to the economy by upward pressure on prices have increased.
The Fed statement generally matches the expectations of most Fed watchers, who had predicted the central bank would sharpen its inflation rhetoric without explicitly saying when rates would rise

Impact:

Gold futures expected to move higher after the Federal Reserve kept interest rates steady but raised concerns over inflation.

Regards,

Kamlesh Jogi

Commodity Analyst

India's rupee gained the most in two weeks

2008-06-25T17:06:00.002+05:30

India's rupee gained the most in more than two weeks after the central bank announced the biggest interest-rate increase since 2000 to curb inflation. Indian rupee last seen at 42.73 with net gain of 35 Pips. The rupee may extend today's advance as investors regain confidence in India's ability to tackle the fastest price growth in 13 years.

India's rupee gained the most in more than two weeks after the central bank announced the biggest interest-rate increase since 2000 to curb inflation. Indian rupee last seen at 42.73 with net gain of 35 Pips. The rupee may extend today's advance as investors regain confidence in India's ability to tackle the fastest price growth in 13 years.

The currency rose from near a 14-month low after the RBI increased the repurchase rate by 0.5 percentage point late yesterday to 8.5 percent and told banks to increase the proportion of deposits kept aside as reserve, the so-called cash-reserve ratio, by a similar margin to 8.75 percent.

There seems to be a sense of emergency in the monetary action, and it should very much be there. This is reasonably positive for the rupee. The central bank announced monetary tightening measures for the second time in two weeks after the inflation rate in Asia's third-largest economy almost tripled this year to touch 11.05 percent in the first week of this month. The Reserve Bank's key repurchase rate is at the highest since 2002.

The rupee's gains were capped by speculation the nation's decision to raise interest rates will fail to reverse losses in the currency this year as a rising oil import bill widens the current-account deficit.

Regards,

Kamlesh Jogi

Commodities Research Analyst.

Weekly Spot Gold Technical Analysis:

2008-06-23T17:22:00.003+05:30

International Spot Gold is trading a tight range of 857 -930 from last 15 days, making volatile movement. Any breakout is required to confirm further trend as Crude Oil and US Dollar are key driving factors.

Weekly Spot Gold Technical Analysis:

The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bulls. MACD is heading downwards in positive region, showing decrease in bullish momentum. The 13-day RSI near 54 and increasing upside indicating bullishness in market, if goes above 70 will make it over bought.

Market is having major resistance at 909 and on the break of it will turn more bullish toward 917 and 928. Strong resistance is there at 928 for long term trend and if break it can go further up till 973.

Initial Support can be seen at 895 on break of it will turn more bearish towards 874.60 and 857. Strong support can be seen at 857 for long term and if break it can fall further to 831 and 785.

Regards,

Kamlesh Jogi
Commodities Research Analyst.

Nigerian oil production has fallen

2008-06-20T14:50:00.000+05:30

Nigerian oil production has now fallen to 1.8 million barrels a day following recent attacks on oil facilities by militants, local daily the Guardian reports Friday, citing the finance minister.

The Guardian quoted Remi Babalola, minister of state for finance, as saying in Abuja Thursday that with a forced oil cut through the destruction of pipelines by militants, Nigeria's production capacity has fallen to 1.8 million barrels a day from 2.4 million barrels a day.

Regards ,

Kamlesh Jogi

WBMS Repoort : Global aluminum market was in a 458,000 metric ton surplus

2008-06-18T16:38:00.000+05:30

The global aluminum market was in a 458,000 metric ton surplus in the first four months of 2008, the World Bureau of Metal Statistics said Wednesday.

This compares with a 29,000 ton surplus in the same period last year.

Demand for primary aluminum was 12.55 million tons, 464,000 tons more than the equivalent total for January to April 2007.

Production rose 894,000 tons to 13.01 million tons during the same period, the WBMS said.

Impact ; This reprot is slightly negative for Aluminium prices.

Regards,

Kamlesh Jogi

WBMS Report - World copper market was in a deficit of 42,000

2008-06-18T16:37:00.000+05:30

The world copper market was in a deficit of 42,000 metric tons during the first four months of 2008, the World Bureau of Metal Statistics said Wednesday.

This compares with a deficit of 135,800 tons for the same period of 2007.

Copper mine production for the first four months of the year was 4.93 million tons, 3.6% lower than in January to April 2007. Refined production rose 1.7% to 5.996 million tons.

Consumption in January to April was 6.04 million tons, virtually unchanged from the same period of the previous year.

Impact ; This is slightly positive for Copper prices.

regards ,

Kamlesh Jogi

MCX Gold range boung, need a clear breakout to confirm trend.- Kamlesh Jogi

2008-06-18T13:58:00.000+05:30

MCX Gold August bounded in tight range of 12250-12334 follwing tight range in currecny segment.

International Spot gold currently trading at $886, mainly trading in range of 880.70 -888, need to break out of major support or resistnace to confirm fresh direction.

Technical Commentary :

Technical are neutral to bearish signaling sideways to lower prices in the near term. Initial support for the market is around 869 levels. If broken can see further fall to 854 and 841 , Pivot level is seen at 882,If market holds above 897 further rally can be seen towards 910 and 927

Currency Factor:
Markets are bounded in tight range today as consolidation continues. Main focus in the European session is BoE meeting minutes which is expected to show a 1-8 vote to keep rates unchanged earlier this month.

Nevertheless, the impact on the markets could be mild even in case of surprises as the minutes itself is not really expected to deliver much newer information than Governor's King's open letter to Chancellor Darling released yesterday.

Other data to be released today included Swiss ZEW which is expected to drop further to -60.8 in Jun. UK CBI industrial trend is expected to drop further to -12 in Apr. Canadian leading indicators will be released in the US session and is expected to climb 0.1% in May.

Regards ,

Kamlesh Jogi

Lead stockpiles at LME posted the biggest daily gain in eight months.

2008-06-17T13:57:00.000+05:30

MCX Lead June dropped to a low of 76.50 on Tuesday afternoon, registered days high near 78.30. Move was supported by LME inventory data. Before it Lead June registered contract low near 75.40 on Monday.

Lead stockpiles monitored by the London Metal Exchange posted the biggest daily gain in eight months.

Inventories tracked by the exchange jumped 11,550 metric tons, or 14 percent, to 94,875 tons, according to LME data. That’s the biggest increase since Oct. 17.

Technical Outlook:

Lead technically is neutral to bearish signaling sideways to lower prices in the near term. Initial support for the market is around 75.5 levels. If broken can see further fall to 73.9 and 72.4, If market holds above 77.0 further rally can be seen towards 78.6 and 80.1

Regards

Kamlesh Jogi

MCX Copper sluggish on china import and production news

2008-06-16T10:48:00.000+05:30

MCX Copper June trading in tight range as china import increased by 13.7% from a year earlier while china production in May rose by 18% on year. Both news are contradiction to trend.

China imported 420,000 metric tons of copper concentrate in May, up 13.7% from a year earlier, according to preliminary data issued by the General Administration of Customs Monday. The country imported a total of 2.29 million tons of copper concentrate in the first five months, up 21.6% on year, it added.

Impact : Data is supportive for copper prices.

China's copper output in May rose 18% on year to 324,000 metric tons, the National Bureau of Statistics said Monday. Total output in the January-May period rose 19% to 1.49 million tons, it said.

Impact : Data is weak for Copper prcies.

Technical Outlook :

Technical have turned neutral to bullish and market is expceted to remian positive above 342.5 levels. If sustain above this level can see a rally towards 345.9 and 350.0 , If market sustains below 338.4 can see a further fall towards 335.1 and 331.0

Recommendation ; Buy on dips of 338 Target 342 and 347 Stop loss at 334.20

MCX Copper futures bounced on Friday

2008-06-14T09:56:00.000+05:30

MCX Copper futures bounced on Friday as traders covered short positions a day after the metal hit its lowest levels in more than two months, MCX Copper June closed nwear 339.60 with gain of Rs. 4.60 per kg after registering days low near 334.30, while days high was registered near 341.80. Comex most-active July copper contract rose 5.10 cents to settle at $3.5890 per pound.

Support came from increasing consumer prices, the U.S. consumer-price index increased 0.6% in May, the Labor Department said Friday. Wall Street has expected an increase of about 0.5%.

Inventories of copper stored in London Metal Exchange warehouses rose 550 metric tons Friday, leaving them at 121,175. The most recent Comex inventory data, released late Thursday afternoon, were steady at 11,040 short tons.

Regards ,

Kamlesh Jogi

MCX Crude Oil July trades volatile on firday

2008-06-14T09:53:00.000+05:30

MCX Crude Oil July traded volatile on Friday following NYMEX movement, closed with some losses from previous day. Registered days high near 5888 and closed near 5796 with loss of Rs. 21 per barrel after registering days low near 5749.

Saudi Arabia is considering increasing its oil production to 10 million barrels a day from 9.45 million, the Middle East Economic Survey reported Friday, a week before a high-profile meeting between crude producers and consumers in Jeddah.

If realized, the output boost would lend credibility to the meeting, set for June 22, to discuss what measures can be taken to usher calm back into global oil markets. Oil prices recently have exhibited unprecedented volatility, with the front-month contract rising by almost $11 on June 6.

Regards,

Kamlesh Jogi

MCX Gold Closes with gains

2008-06-14T09:49:00.000+05:30

MCX Gold futures spent much of Friday slightly lower, but bounced back to end in mildly positive territory on support from inflationary indications even as a higher dollar and lower oil capped buoyancy.

MCX Gold August closed near 12133 with gain of 25 from previous closing, market registered days low near 11983 and days high near 12159.

But the downside was also limited because many participants didn't want to go short over the weekend. Participants also booked some profits ahead of the weekend.

Gold futures finished modestly higher Friday, helped by inflationary indications even as a higher dollar and lower oil capped its buoyancy.

Support came from increasing consumer prices ,the U.S. consumer-price index increased 0.6% in May, the Labor Department said Friday. Wall Street has expected an increase of about 0.5%.

Regards,

Kamlesh Jogi

Weekly US Economy and Currency

2007-12-15T17:46:00.000+05:30

Weekly US Economy Update

There was a significant shift in investor attitudes during the week with at least a temporary shift in the trends that have dominated for the past few weeks. The dollar secured relief from stronger than expected US economic data while there was renewed selling pressure on low-yield, defensive currencies.

Following the latest FOMC meeting, the Federal Reserve cut the Fed Funds rate by a further 0.25% to 4.25% . The discount rate was also cut by 0.25% to 4.75%.In the statement accompanying the decision, the Fed stated that uncertainty over growth and inflation had increased. There were also comments that consumer spending and business investment and shown signs of weakening slightly while the housing adjustment was intensifying.
Core inflation was described as under control, but there was still unease over potential pressures and the inflation data was a cocnern. Headline producer prices also rose very strongly by 3.2% in November, the highest increase for over 30 years as energy costs increased, although the underlying increase was held to 0.4% for the month. The consumer inflation data was also higher than expected with a 0.8% headline increase and a 0.3% core increase.

As credit conditions remained very tight, the Federal Reserve announced a series of fresh liquidity injections. A wider range of collateral would be accepted and the interest rates would not be set at penal rate in an attempt to free up the credit markets.

Retail sales rose strongly by 1.2% in November while there was a 1.8% underlying increase. Although sales were boosted by a strong rise in gasoline sales, there was still a solid underlying increase which boosted confidence over spending trends.

The US trade deficit increased slightly to US$57.8bn for October after a revised US$57.1bn the previous month as higher oil prices put upward pressure on imports.

Weekly Currency Update

The German ZEW index weakened to the lowest level since 1993 at -37.2 while ZEW institute warned that the strong Euro was having a damaging impact with growth faltering.
The dollar weakened to lows near 1.4750 against the Euro, but then strengthened sharply to test important Euro support levels in the 1.45 region on Friday.

The Japanese Tankan index for major manufacturers fell to +19 in December from +23 the previous month which undermined confidence in the economy, although capital spending plans were revised up.

The yen hit selling pressure beyond the 111.0 level against the dollar and weakened to lows near 113.0 as carry trades found renewed buying support.

The Swiss National Bank left interest rates unchanged at 2.75% following the latest quarterly meeting, the first time rates had been left on hold for two years.

The bank upgraded its inflation forecast for 2008 slightly, although the bank expressed no urgency over the inflation situation. Bank chairman Roth also warned that the banking difficulties would have some negative economic impact.

A renewed interest in carry trades pushed the franc to lows beyond 1.67 against the Euro while the Swiss currency also weakened to 1.15 against the dollar.

The UK housing data remained weak with the RICS index recording a further drop to -40.6% in November from -23.4% previously which was the weakest reading for over two years as underlying confidence in the housing sector continued to deteriorate.

The labour-market data was firmer with unemployment falling by a further 11,000 for November. Headline earnings growth remained under control with a decline to 4.0% in the year to October from 4.1%.

Wider inflation fears were still a significant factor with inflation expectations rising to a nine-year high while headline output producer prices inflation was also at a 5-year high, although the core data was more favourable with a 2.1% annual increase.

Sterling secured further support weaker than 0.72 against the Euro over the week while general dollar strength pushed the UK currency back to lows around 2.0250 against the US currency from a peak above 2.05.

Weekly Expected Economic Data
Week of December 17 - December 21
Date IST ET Release For Consensus Prior
Dec-17 19:00 9:30 Current Account Q3 -$183.0B -$190.8B
Dec-17 19:00 9:30 NY Empire State Index Dec 21 27.4
Dec-17 19:30 10:00 Net Foreign Purchases Oct -$26.4B
Dec-18 19:00 9:30 Housing Starts Nov 1190K 1229K
Dec-18 19:00 9:30 Building Permits Nov 1150K 1170K
Dec-19 21:00 11:30 Crude Inventories Dec-14 NA -722K
Dec-20 19:00 9:30 GDP-Final Q3 4.90% 4.90%
Dec-20 19:00 9:30 Chain Deflator-Final Q3 0.90% 0.90%
Dec-20 19:00 9:30 Initial Claims Dec-15 NA 333K
Dec-20 20:30 11:00 Leading Indicators Nov -0.10% -0.50%
Dec-20 22:30 13:00 Philadelphia Fed Dec 8 8.2
Dec-21 19:00 9:30 Personal Income Nov 0.50% 0.20%
Dec-21 19:00 9:30 Personal Spending Nov 0.50% 0.20%
Dec-21 19:00 9:30 Core PCE Inflation Nov 0.20% 0.20%
Dec-21 20:30 11:00 Mich Sentiment-Rev. Dec 74.3 74.5

FOMC Meeting

2007-12-11T17:00:00.000+05:30

Regarding the FOMC meeting, we expect a 25 basis points cut of the FF target rate, most likely accompanied by a bigger 50 basis points rate cut of the discount rate. The market has trimmed back its expectations for a 50 basis points cut, that were still rated more than even at the start of last week. Currently, the market discounts still a 30% chance on a 50 basis points rate cut. Two weeks ago, it looked that a clash between markets, desperately looking for lower rates, and the Fed hinting that no immediate rate cut was needed (October Minutes, talk of some governors like Plosser) was imminent. However, at that time, the top of the brass band (Kohn & Bernanke) stepped in, saying that financial conditions had worsened sharply since the previous meeting and hinting the Fed would act to contain the stress. It clearly improved sentiment (equities rebounded) and suggested to some in the markets that the Fed might go for a 50 basis points cut to get ahead of the curve (especially re-garding the credit problems). However, Bernanke, very much looking for a broad consensus, will probably try to build consensus for a 25 basis points in an attempt to keep most governors on board. This was the main reason we stick to our 25 basis points call. Recent eco data, payrolls-ISM, do not point either to the need for a big shot. Money market strains and difficulties at some big US banks on the other hand suggest that a bigger cut in the discount rate would be appropriate (even a 50 basis points cut in the FF would from this angle be not so silly). Also Kohn hinted that the previous cut of the discount rate had not had the expected result and so we might see the Fed making the discount window facility more attractive by narrowing the spread with the FF rate. If the Fed goes 25, we suspect that the statement will leave the possibility of more easing open, without going so far as to hint for another rate cut. With signs that credit

OPEC to keep production steady

2007-12-05T15:35:00.000+05:30

OPEC to keep production steady

OPEC has decided to keep output ceilings steady, Libya's chief oil official said Wednesday. Other delegates said the 13-nation group will meet again in January to review that decision.

The announcement by Shokri Ghanem appeared to reflect OPEC concerns that it would be counterproductive to raise production ceilings at a time when prices have retreated about 10 percent from recent record highs.

There was no immediate formal confirmation. But just hours before Ghanem's comments, a three-nation OPEC advisory panel foreshadowed such a decision by recommending maintaining the status quo.

Reduced demand growth forecasts from both OPEC and the International Energy Agency have pushed prices down recently, along with the extra oil reaching markets from the last OPEC production increase and expectations of increased output from the United Arab Emirates.

A new U.S. intelligence report concluding that Iran halted its nuclear weapons development program in 2003 is also helping to keep a lid on the market. While oil prices are still up nearly $40 from the start of the year, they are down about 10 percent from the record near $100-a-barrel levels established last month.

Source: Bloomberg

Crude Oil - Opec Meeting

2007-12-04T19:03:00.000+05:30

Petroleum markets brace for OPEC meeting –

The petroleum markets are nervously awaiting tomorrow’s OPEC meeting in Abu Dhabi. The market seems to be roughly split on the question of whether OPEC will raise its production. The reality is that Saudi Arabia is the only country with any significant excess capacity, which means OPEC’s decision as usual hinges mostly on what Saudi Arabia wants to do. The Saudi oil minister said last Friday that, “There is absolutely ample supply. The price movement has nothing to do with the fundamentals of the market.” That suggested that Saudi Arabia is not in favor of raising production since according to the Saudi oil minister’s view, supply is not the problem. OPEC as a whole is also concerned that the global economy may be on the brink of a downturn, which would mean that a sudden glut of oil could emerge if OPEC were to increase production at the same time as the global economy and oil demand turn lower. Since posting a record h igh of $99.29 two weeks ago, crude oil futures have sold off by a total of about $12 per barrel.

The market has moved lower on technical long liquidation pressure and increased concern about lower oil demand from high oil prices and weaker global economic growth. Oil prices also moved lower on the possibility that OPEC tomorrow might decide to raise production a notch. OPEC at their last meeting in September decided to increase their official production quota by 500,000 bpd. In fact, OPEC production (excluding Iraq) rose by +305,000 bpd in October from the previous month, with 100,000 bpd of that increase coming from Saudi Arabia. Since OPEC has yet to fully implement their previously announced 500,000 bpd increase, OPEC members may believe it is premature to announce another hike.
Source - Bloomberg

Copper – Fundamentals Remain Bearish : Kamlesh Jogi

2007-12-04T16:44:00.001+05:30

Copper – Fundamentals Remain Bearish

We have seen a short covering in Copper prices last week and market pushed down as Contract rollover and expiry settlements are over in International and national exchange.
I personally expect market to remain bearish in Short run and expect market to touch Rs. 220 per kg in MCX feb 2008 Contract.

Fundamentals:

· Copper fell in London, tracking stock markets lower, on concern slowing U.S. economic growth will curb demand for industrial metals. Nickel and zinc also dropped.

· The MSCI World Index of stocks fell 0.2 percent. Federal Reserve Bank of Boston President Eric Rosengren said yesterday U.S. expansion will be ``well below'' its long-term pace for two quarters. The U.S. is the world's second-largest user of copper and aluminum after China.

· Copper, which tends to track movements in global growth, is poised for the smallest gain in six years as bad debts in the U.S. housing market have slowed bank lending and curbed consumption in the world's largest economy.

· Japanese manufacturing orders, driven by residential and office construction, may drop 17 percent in a year because of declining housing starts, said Takashi Ishizawa, a real-estate analyst at Mizuho Securities Co.

· A housing slump will probably erode demand for industrial metals, including copper and nickel, according to the Japanese Electric Wire and Cable Makers' Association and the Japan Stainless Steel Association.

· Copper stockpiles monitored by the LME declined 1,325 tons, or 0.7 percent, to 188,175 tons, it said in a daily report, the biggest one-day drop since Sept. 17. They have jumped 44 percent since the end of September.

Technical Levels:

MCX Feb 2008 contract is having major resistance level at 272.90 and 283.10 while major support is seen at 259.10 and on the break of the same market may test the level of 242 and 220.

Recommendation;

Traders are advised to create short position on small pullback, market may give small up side correction/Short covering, can be used as Selling opportunity. Traders should become more cautious if market breaks major resistance levels.

Author:

Kamlesh Jogi
Commodities research Analyst

Mail me at: kamleshjogi@gmail.com

Disclaimer: Keep reasonable stop loss levels, follow them very strictly and keep trailing the stop loss. The information contained in this article is collected from reliable sources and believed to be true. Opinions expressed are those of the individual, and readers are urged to exercise their own judgment in trading.

How Long Will Oil Be Priced in Dollars? : By Stephen Clayson

2007-11-26T18:14:00.000+05:30

How Long Will Oil Be Priced in Dollars? By Stephen Clayson

LONDON (ResourceInvestor.com) -- With few exceptions, oil is priced in dollars, even when it is produced in countries with diverse economies and major currencies, rather than petrostates with little going on except oil production.

In the latter case, oil that was priced in the local currency would leave it subject to unpredictable swings in response to global oil prices and the output of the country in question.

As it is, a great deal of oil is produced in countries with little to underpin their economies besides oil, so pricing the black stuff in an international currency makes sense, especially when that currency is that of the primary buyer of the oil concerned. It makes things simple for the buyer and lets the seller take its revenue in a major currency.

The situation of primary buyer of the world’s oil is the situation the U.S. has found itself in for quite a few decades now, and in fact the U.S. remains the single largest oil consuming nation. So the fact that oil is priced in dollars is unsurprising.

The result is that virtually every country in the world needs to hold dollars in order to buy oil on the world market. The same goes for large commercial oil buyers. This need for dollars has been a big factor in conferring the premium on the dollar that it has long enjoyed, but is now in the process of losing.

The eurozone economies considered as a whole come a close second to the U.S. in oil consumption, but China probably could tear past both in the coming years.

With the dollar slipping downhill, there is a case for sales to be made in another currency, the most obvious candidate being the euro. Although the oil price moves with the dollar, there is now an unhelpful amount of uncertainty about the nominal price.

Indeed, oil’s approach to within spitting distance of the psychologically huge $100 a barrel mark, although underwritten by extremely firm global demand, is as much about the falling dollar as it is about geopolitical uncertainty. Viewed in euros, the real oil price looks much less scary.

Pricing in euros should make no odds to most of the world’s big oil buyers. And once that switch is made, why not follow suit for the other commodities? Perhaps initially to euros, but then to renminbi as China becomes the biggest buyer of pretty much everything and the renminbi becomes a free-floating international currency.

Iran already sells oil in euros and is leading a push for wider adoption within OPEC. Iran was also planning to set up a euro-denominated oil bourse, although all seems to have gone suspiciously quiet on this front of late. However there is no reason why the idea couldn’t be revived. And if the cause of euro oil sales is taken up by a country less reviled than Iran, then it could see wider adoption.

Venezuela is also an advocate, but like Iran, is not well respected internationally. Saudi Arabia is against any move away from the dollar given its close alignment with the U.S., as well as its large dollar reserves, the value of which will be hurt by a move away from dollar oil sales. Looking outside the Gulf, Russia seems like another large producer that might have little reluctance to start selling oil in euros.

Tied up with this is the issue of the numerous petrostates that peg their local currencies to the dollar. The Kuwaitis have already abandoned their dollar peg in favour of a trade weighted basket that includes the euro in a significant way, and their Gulf neighbours will likely go the same way eventually. Once this is the case, then the logical next step is to sell some oil in euros.

Looking to what this means - even with the base metals complex taking a nasty knock this week, the ongoing degradation of the dollar will assure the gold market of a lively time. And the ongoing shift in the balance of economic power in favour of Asia means that the base metals look pretty decent in the long term. The probable end of dollar oil pricing is just one more dollar bearish factor among many.

Copper

2007-11-24T16:17:00.000+05:30

Copper rose the most in a week after inventories plunged in China, the world's biggest user of the metal.

Stockpiles monitored by the Shanghai Futures Exchange dropped 21 percent to 44,855 metric tons this week, marking the biggest decline since the week ended Jan. 25. Copper, used in pipes and wires, has more than tripled in the past four years as demand grew in China, the world's fastest-growing major economy.

Chinese copper use rose 38 percent in the eight months ended Aug. 31, the International Copper Study Group said on Nov. 16. Demand will continue to rise as the Chinese economy accelerates, said Patricia Mohr, an analyst at Scotiabank Group in Toronto.
Copper also rose as U.S. equities rebounded, easing concern that the U.S. economy is deteriorating. The Standard & Poor's 500 Index climbed as much as 1.7 percent. Industrial metals have the highest correlation among all commodities to the equity market, according to Deutsche Bank AG.

Copper still dropped 5.3 percent this week on speculation that slower economic expansion will curb demand in the U.S., the world's second-largest copper consumer.

Federal Reserve officials this week cut their 2008 U.S. growth forecasts, predicting the economy will expand by 1.8 percent next year. Copper has dropped 20 percent since reaching an 11-month high on May 4 as a slump in U.S. housing slowed the economy and reduced metals usage.

Bullion - Gold n Silver

2007-11-24T16:16:00.000+05:30

Gold jumped 3.3 percent, capping the biggest weekly gain since July 2006, as the dollar's decline to a record against the euro and climbing energy costs sparked demand for the metal as a hedge against inflation.

The price of gold has surged 29 percent this year, and the dollar is down 10 percent to the lowest ever against a basket of six currencies, including the euro and the yen. Crude oil closed above $98 a barrel, and heating oil climbed to a record.

The dollar dropped to a record $1.4967 against the euro, the weakest since the single European currency's debut in 1999. Gold has rallied during five of the past six bear markets for the dollar.

The dollar index on ICE Futures U.S., formerly the New York Board of Trade, measures the U.S. currency against the weighted values of the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc. The index touched 74.484 today, the lowest ever.
Gold also gained on heightened speculation that the Federal Reserve will lower borrowing costs. Interest-rate futures indicate a 98 percent chance the Fed will lower its benchmark lending rate by a quarter point to 4.25 percent at its December meeting.

The central bank lowered the benchmark rate by 0.25 percentage point to 4.5 percent on Oct. 31, driving gold to a 27-year high of $848 on Nov. 7.

Silver futures for December delivery climbed 31.5 cents, or 2.2 percent, to $14.735 an ounce. The metal is up 14 percent this year.

Crude Oil

2007-11-24T16:13:00.000+05:30

Crude oil futures rose in New York, reaching a record closing price above $98 a barrel, on concern fuel stockpiles will drop as the heating season gets under way.

Futures have surged 21 percent in the past two months as the dollar fell and U.S. inventories declined. Supplies of crude oil and distillate fuel, a category that includes heating oil and diesel, fell last week, according to an Energy Department report on Nov. 21. Transactions were lighter than usual today as some traders took a long Thanksgiving holiday weekend.

The Organization of Petroleum Exporting Countries will load 24.5 million barrels a day onto tankers in the four weeks to Dec. 8, compared with 23.8 million barrels in the month ended Nov. 10, Oil Movements said. It will be OPEC's 14th consecutive increase and the biggest this year, according to the company, which tracks shipments.

OPEC, which produces more than 40 percent of the world's oil, is scheduled to discuss crude-oil production for the first quarter of 2008 at a meeting in Abu Dhabi on Dec. 5.

Weekly US Economic Calendar

2007-11-24T16:10:00.000+05:30

Week of November 26 - November 30
Date IST ET Release For Consensus Prior
Nov-27 20:30 11:00 Consumer Confidence Nov 91.5 95.6
Nov-28 19:00 9:30 Durable Orders Oct 0.00% -1.70%
Nov-28 20:30 11:00 Existing Home Sales Oct 5.00M 5.04M
Nov-28 21:00 11:30 Crude Inventories Nov-23 NA -1071K
Nov-28 12:30:00 15:00 Fed's Beige Book
Nov-29 19:00 9:30 GDP-Prel. Q3 4.80% 3.90%
Nov-29 19:00 9:30 Chain Deflator-Prel. Q3 0.80% 0.80%
Nov-29 19:00 9:30 Initial Claims Nov-24 NA 330K
Nov-29 20:30 11:00 New Home Sales Oct 750K 770K
Nov-30 19:00 9:30 Personal Income Oct 0.40% 0.40%
Nov-30 19:00 9:30 Personal Spending Oct 0.30% 0.30%
Nov-30 19:00 9:30 Core PCE Inflation Oct 0.20% 0.20%
Nov-30 20:15 10:45 Chicago PMI Nov 50.5 49.7
Nov-30 20:30 11:00 Construction Spending Oct -0.20% 0.30%

US Economy and Currency Update

2007-11-24T16:06:00.000+05:30

US Economy Last Week

The Organization for Economic Cooperation and Development said yesterday that losses from U.S. subprime mortgages could eventually total $300 billion, based on an estimated 14% default rate. Mortgage resets are expected to peak in May of 2008 so more will be known as time unfolds. The June eurodollars were unchanged at 96.19.

The Conference Board's index of leading indicators was down .5% in November, weaker than expected. Only three of the ten indicators showed a positive gain with stock prices being the strongest component. Of course, stock prices have not held up since then. The June eurodollars closed up .12 at a new contract high of 96.19.
The U.S. Labor Department said that jobless claims were down 11,000 last week to 330,000.

The U.S. Census Bureau said that housing starts were at an annual rate of 1.229 million units in October, up 3.0% from September's pace and down 16.4% from a year ago. Building permits were down 6.6% in October. March lumber ended down $1.00 at $278.50.

Federal Reserve said that they expect real U.S. GDP to increase 2.45% in 2007, but lowered their estimate for 2008 from 2.62% to 2.15%. They also expect the core rate of inflation to average 1.87% in 2008. The June eurodollars were down .005 at 96.07.
Analysts from Goldman Sachs advised their clients to sell Citigroup, saying that they may have to write down $15 billion of bad mortgages over the next two quarters. Also, a disappointing earnings forecast from Lowe's is pushing the stock market lower. The December U.S. T-bonds closed up 21/32nds at a new contract high of 116.07/32nds.

The National Association of Homebuilders said that their sentiment index was unchanged at 19 in November, the lowest reading since it began in 1985.
Canada's corporations posted C$46.0 billion of after-tax operating profits in the third quarter, up 6.7% on the quarter and up 11.3% from a year ago. Results were especially strong in the banking and oil industries. The December Canadian dollar was up .0023 to $1.0144.

Currency Update Last Week

The U.K.'s Office for National Statistics reduced its estimate of real GDP growth in the third quarter from .8% to .7%. From a year ago, real GDP was up 3.2%. The December British pound ended down .0026 at $2.0585.
In the Euro area (13), industrial new orders were down 1.6% in September, but up 2.0% from a year ago.

Japan's exports hit a record high 7.52 trillion yen in October, up 14% from a year ago. The December Japanese yen finished up .0088 at a new contract high of .9230, helped by its new status as the currency with the least exposure to subprime mortgages.

Retail sales in Canada were down .2% in September, but up 5.4% from a year ago. Excluding autos, sales were up .1% on the month. The December Canadian dollar fell .0049 to $1.0121.

The Bank of England voted 7 to 2 to keep its rates unchanged at the latest meeting.
Consumer prices in Canada were up 2.4% in October from a year ago, down from a 2.5% gain in September. The December Canadian dollar ended down .0006 at $1.0170.
Canada's wholesale sales were up 1.1% in September, stronger than expected. The December Canadian dollar fell .0086 to $1.0176.

LME Inventory

2007-10-12T13:36:00.000+05:30

LME DATA:
COPPER UP 2300,
TIN DOWN 15,
LEAD UP 50,
ZINC DOWN 200,
ALUMINIUM UP 1625,
NICKEL DOWN 258,

Impact: Data is negative for Copper, Lead and Aluminium, While positive for Tin, ZInc and Nickel.

US EONOMY UPDATE

2007-10-10T20:27:00.000+05:30

Dollar softens further across against most currencies into US session.Technically speaking, break of intraday support levels indicates last week's recovery in the greenback has likely completed and further downside will likely be seen. Though, price volatility may be limited as the economic calendar is light, with wholesale inventory featured only. Low yield majors, the yen and swissy remains pressured in crosses.BoJ will announce rate decision in the coming Asian session and is widely expected to keep rates unchanged at 0.50%. Meanwhile, the Swissy is weighed down by SNB Roth's comment yesterday that the bank has no plan to raise rates again from the current 2.75%.

Currecny Update

2007-10-10T13:44:00.000+05:30

Dollar remains pressured against most currencies after FOMC minutes. While further rate cut is generally expected by the end of this year, opinions are still divided on whether that will be delivered in the Oct or Dec meeting. Unsurprisingly, recent market turmoil and credit tightening were the main focus of the meeting the members judged loosening monetary policy was an appropriate response to the tightening in credit. Even though, there is no specific plan for further rate cuts and "further actions would depend on how economic prospects were affected by evolving market developments and by other factors", members are generally concerned that "outlook for economic activity as characterized by particularly high uncertainty, with the risk to growth skewed to the downside." On inflation, the members "recognized that incoming data on core inflation continued to be favorable, and they generally were a little more confident that the decline in inflation earlier this year would be sustained." Though, "inflation risks could be heightened if the dollar were to continue to depreciate significantly."

Where do you expect GOLD prices on this Diwali???

2007-10-06T18:56:00.000+05:30

Where do you expect GOLD prices on this Diwali???

Enter your vote today! A new poll has been created for thecommoditytalk group:

Where do you expect GOLD prices on this Diwali???
o Above 10500
o Range 9200-9800
o Below 9000
o Can't predict

To vote, please visit the following web page:http://groups.yahoo.com/group/commoditytalk/surveys?id=1931261

Note: Please do not reply to this message. Poll votes arenot collected via email. To vote, you must go to the Yahoo! Groupsweb site listed above.

Thanks!

Kamlesh Jogi

Nymex Crude Oil

2007-10-06T11:34:00.001+05:30

Source: Future Source

Nymex crude traded in a narrow range earlier in the day on Friday, holding on to the 1.9% leap noted in the previous session, as market participants waited for fresh cues to move prices. Nymex crude slipped by almost a dollar as dollar strengthened after the positive job's data eased expectations that Fed may impose another cut in interest rates and on lack of immediate threat to the energy infrastructure in the Gulf of Mexico from storm activity.
Dollar rose after reports noted that Non-farm payrolls rose 110,000 in September. Also August data was revised to an 89,000 rise from a previous estimate of a 4,000 decline. Earlier, the August report showed the first decline in jobs in four years, sparking concerns that the US subprime mortgage problems were affecting larger economy.
Concerns that US subprime market woes may affect larger economy induced US Fed to impose a sharper than expected cut in interest rates. Oil prices rallied last month when the Fed cut rates more than forecast, because it was expected this would aid economic growth and therefore energy demand.
While the stronger jobs data bode well for the economy, oil traders have been focusing on dollar movements in recent weeks and a slump in the currency has been a factor in helping push prices to their record. A weaker dollar gives oil producers extra incentive to drive prices higher. It also renders dollar-denominated crude oil cheaper in other currencies
Nymex crude fell earlier this week following some correction in the market after the rally witnessed last week however the losses were recouped on Thursday as funds indulged in buying after the dip in prices and also as US weekly petroleum report noted an unexpected decline in gasoline and distillate stocks.
Easing storm concerns, The US National Hurricane Center said Friday it did not expect any of six Atlantic low pressure systems it is watching to develop into a tropical cyclone Friday.
Yesterday, Nymex crude Nov. contract settled at $81.22 per barrel with a decline of 22 cents and traded in a range of $80.51 to $81.68 per barrel.
Over the week, front month contract noted a decline of 44 cents or 0.5% and moved in a range of $78.87 to $81.75 per barrel. It noted a 4 cent rise in the previous week. Nymex crude slipped over last week after noting five weekly gains
Yesterday, ICE Brent crude Nov. contract settled at $78.90 per barrel with a decline of 7 cents and traded in a range of $78.17 to $79.21 per barrel.
Over the week, front month contract noted a decline of 27 cents or 0.3% and traded in a range of $76.56 to $79.54 per barrel. It dropped by 13 cents in the previous week
Middle-East crude oil Dec. contract on ICE ended yesterday at $74.51 per barrel with a decline of 3 cents while Oman crude oil contract for Dec. delivery on Dubai Mercantile Exchange ended yesterday at $75.47 per barrel with a gain of 32 cents.
As per the COT report, speculators for Nymex light sweet crude oil futures trimmed their long and short positions but continued to be net long for the week ended Oct. 2. They raised their net long position by 12906 contracts or 29.6% in the report week after trimming it by 19.6% in the previous week.
Nymex crude front month contract noted a modest fall over last week after jotting five straight weekly gains. As per a survey by Bloomberg, crude oil prices may decline in the coming week on speculation that US inventories will rise because of refinery maintenance and increased OPEC output
While there are no immediate storm concerns, the Atlantic hurricane season is far from over. Also Colorado State University forecasters expect above-average hurricane activity in October and November, with four named storms, two hurricanes and one major hurricane.
In the coming week traders will look ahead for the International Energy Agency's monthly oil market report which will be released Oct. 11 and US Energy Information Administration's winter fuel outlook due Oct. 09.
The reports could hold more weight than the agencies' regular monthly reports because the record crude prices have been largely driven by forecasts of a supply deficit in the fourth quarter and early 2008. Any expectations for a warmer-than-normal winter, or expectations of slowing demand, could hurt price perceptions, while on the other hand, decreases in non-OPEC production or a shrugging of subprime concerns could have the other effect.

Copper seen at USD9,000 in April-May,'09

2007-10-06T11:28:00.000+05:30

Source: Bloomberg

Copper prices should rise to $9,000 a metric tonne by April-May, 2009, as a combination of a physical demand and a peak in index fund holdings takes its toll, Bloomsbury Minerals analyst Chris Welch said Friday.

Copper's price forecasts have systematically been underrated, Welch said, because many statistics fail to take into account the consumption of unreported stocks, mine production has been over-forecast and the requirement for working stock has been ignored in a growing industry. Additionally, he said long-only investment in copper has been confused with speculative trade. Speaking at the 20:20 Investor Series seminar in London, Welch said Bloomsbury predicts a surplus of 25,000 tonnes of copper in the third quarter of 2007, which is smaller than many had expected. In the fourth quarter of 2007, demand from western Europe and the US will be very weak but the fate of the copper market is determined by consumers in China, India, Russia, Central Europe and the Middle East, Welch said. Strikes in Peru and Mexico are also important to price forecasts, Welch added. Welch said Bloomsbury sees reference to BRIC - Brazil, Russia, India and China - as a distraction to where real copper demand is coming from. Most demand is coming from a combination of Brazil, India, Indonesia and China, where consumption has increased the most between 2002 and 2007 by 2.36-million tonnes.

Another important grouping is the UAE, Turkey, Egypt, Saudi Arabia, where copper demand grew by 2,60,000 tonnes between 2002 and 2007, Welch said. Demand in Germany, Italy, Russia, Poland grew by 9,05,000 tonnes. Meanwhile, demand for copper in the UK, US, Australia and Greece declined by 6,45,000 tonnes. In 2008 and 2009, reduced annual growth in essential working stocks will create a tiny commercial deficit, with raw materials supply predicted to remain tight.

Welch said on top of a deficit in the refined copper market in 2007, there is also one in the concentrates market. But mine production is expected to speed up in 2009-2010, and then roughly 15% of the next four years' production growth will go to rebuild concentrates stocks to more normal levels.

Welch forecast a commercial copper market surplus for 2010-2011, largely because it is assumed the "once per decade" global recession will occur then. However, he said if there isn't a global recession then copper market conditions will be tight until new projects currently going through the feasibility stage come on stream. Much of this new output is expected from 2012 onwards.

Bullion

2007-10-06T11:25:00.000+05:30

Gold futures went on a roller-coaster ride with the euro Friday, first tumbling with the single European currency after a stronger-than-expected US jobs report but soon shooting higher again.

December gold rose $3.40 to $747.20 a troy ounce on the Comex division of the New York Mercantile Exchange. More significantly, it closed up $15 from an early-day electronic low of $732.70.

As pit trade was closing, the December contract at the Chicago Board of Trade was up $3.60 to $747.20. Comex December silver fell a penny to $13.49, but bounced from a low of $13.31. Shortly after it closed, CBOT December silver was down 0.2 cent to $13.494.

Interest rate Decisions

2007-10-04T19:47:00.001+05:30

Both ECB and BoE left interest rates unchanged as widely expected.Euro dips mildly, in particular against Sterling, as market interprets Trichet's remarks in the following press conference as less hawkish than expected. No "vigilance" is used as widely expected. To some's surprise, Trichet dropped the description of "on the accommodative side" to interest rates. Also, Trichet emphasized the need to "gather additional information and examine new data before drawing further conclusions for monetary policy". Trichet highlighted that "particular" caution is needed to be given to the financial market development which heightened risks to growth of the Eurozone economy. Though Trichet does noted recent climb in HICP inflation and that medium term risks to inflation remain on the upside and ECB stand ready to counter these risks.

US Preview

2007-10-03T17:41:00.000+05:30

Asian stocks today closed mixed with the Nikkei index up +0.90%, but with Hong Kong closing -2.55%. The Chinese stock market remains closed for the Golden Week holidays. The European DJ Stoxx 50 is slightly higher by +0.06%

Mortgage applications – Today's weekly MBA report showed a -2.7% decline in the MBA mortgage applications index, a -1.8% decline in the purchase mortgage sub-index to a 5-month low, and a -3.8% decline in the refinancing sub-index. Last week, the weekly MBA mortgage applications index fell –2.8%, the purchase sub-index fell –7.2%, and the refi sub-index rose +3.3%. Mortgage applications are now fading after initial strength seen after the mortgage crisis began in early-August as people tried to push through purchase and refi mortgage applications before conditions became any worse. However, anecdotal information suggests that banks are turning down more than the usual number of mortgage applications due to the tighter underwriting restrictions. That means that the mortgage applications index is overstating the number of mortgages that are actually being closed. Yesterday’s Aug pending home sales report fell sharply by –6.5%, adding to the –10.7% plunge seen in Augus t. The 2-month plunge in pending home sales is a negative leading indicator for existing home sales and mortgage applications. The only thing the housing market has going for it right now is lower mortgage rates. The 30-year mortgage rate has fallen sharply by a net 32 bp to the latest level of 6.42% from the 14-month peak of 6.74% seen in mid-June. That has made mortgage cheaper and homes more affordable, at least for those that can still qualify for a mortgage.

ISM non-manufacturing index – Today’s Sep ISM non-manufacturing index is expected to show a modest decline of -1.2 to 54.6 following August’s report of unchanged at 55.8. The expected report of 54.6 would leave the index at the third lowest level in 2 years, just 0.4 points above the 2-year low of 52.4 posted earlier this year in March. Still, the index would remain above the boom-bust level of 50, indicating a continued expansion in the US service sector. The markets are continuing to watch the US economic data very closely for signs of a possible significant drop in business and consumer confidence due to the housing and financial market crisis.
Dec S&Ps this morning are trading lower due to some negative technology stock news for Intel/AMD and Micron Technology and due to some long liquidation pressure after Monday's rally. The US stock market yesterday closed mixed following Monday's sharp rally (Dow -0.29%, S&P 500 -0.03%, Nasdaq Composite +0.22%). The stock market yesterday held Monday's gains as the market was encouraged that UBS and Citicorp came clean on writing down fixed income portfolios and as buying emerged at the beginning of the quarter. There is general optimism that the US economy will continue to chug along at a decent pace, supported by global growth and demand for US exports. Moreover, US stock market valuations remain reasonable.",1]

ISM non-manufacturing index – Today’s Sep ISM non-manufacturing index is expected to show a modest decline of -1.2 to 54.6 following August’s report of unchanged at 55.8. The expected report of 54.6 would leave the index at the third lowest level in 2 years, just 0.4 points above the 2-year low of 52.4 posted earlier this year in March. Still, the index would remain above the boom-bust level of 50, indicating a continued expansion in the US service sector. The markets are continuing to watch the US economic data very closely for signs of a possible significant drop in business and consumer confidence due to the housing and financial market crisis.

US Economy Update

2007-10-03T15:50:00.000+05:30

Markets' focus is turning to services data and ADP employment report today. ISM non-manufacturing index is expected to drop slightly from 55.8 to 55 in Sep with price paid index dropping from 58.6 to 57. With Friday's highly anticipated NFP in sight, the employment component of the ISM non-manufacturing report will be closely watched. This employment component surprisingly dropped to contractionary level at 47.9 in Aug, marking first contraction since Jul 04. The private ADP employment report, which serves as a preview to NFP is expected to show 53k job growth in Sep. Monday's recovery in the employment component in the ISM manufacturing report provided some support to a rebound in NFP in Sep. Markets will look into whether the ISM non- manufacturing employment and ADP provide further support or offset that positive data.

Currency Update

2007-10-02T16:02:00.001+05:30

Dollar continues to recover against most currencies as markets are preparing for key event risk of NFP on Friday. Meanwhile, despite strong rally in global and US stock markets, the Japanese yen also recovers mildly against dollar and in crosses. UK construction PMI, Eurozone PPI and unemployment as well as US pending home sales will be featured today. But markets seems to have passed a climax in near term and further choppy trading will likely be seen, at least before ECB and BoE rate decision on Thursday.

Todays US Data

2007-10-02T15:51:00.001+05:30

Todays US Data : 2 Oct US Pending Home Sales, Total Vehicle Sales, Domestic Vehicle Sales

LME Warehouse Stocks

2007-10-02T15:49:00.001+05:30

LME Zinc Warehouse Stocks -125 MT To 60,725 MT
LME Aluminum Warehouse Stocks -525 MT To 936,875 MT
LME N Amer Alloy Warehouse Stocks -120 MT To 120,720 MT...
LME Copper Warehouse Stocks +175 MT To 130,850 MT
LME Lead Warehouse Stocks -225 MT To 22,325 MT
LME Nickel Warehouse Stocks +0 MT To 0 MT
LME Alu Alloy Warehouse Stocks -400 MT To 69,900 MT
LME Tin Warehouse Stocks -170 MT To 13,820 MT

US Economy Outlook

2007-09-29T11:39:00.000+05:30

The outlook here in the U.S. still looks grim, with the housing sector and mortgage crisis weighing on the economy. At the end of September, Consumer Confidence fell again to 99.8. The Case/Shiller data released for the month of July showed a .45% m/m decline in home prices. Ultimately, the rate cut decision should turn the housing sector around into next year. With the amount of inventory on the U.S. housing market, prices for homes lower, and a more attractive mortgage rate, the end of the housing meltdown could be near. Until that time, the Canadian economy should stay strong with the expectations for further U.S. rate cuts in the works. The Bank of Canada has put their rate increase on hold for the last couple of months, due mostly to credit issues and lower rates here. If there are further cuts here and increases in Canada, this could create another carry trade market that would not help support the USD.

As the fundamentals continue to weigh on the USD, the downside breaks are areas of opportunity to catch the new lows. The last time we wrote about this market, it was at the 1.0550 level and we waited for the breakout under the 1.05 level. Once again, we will wait for another low to get in. If not, we run the risk of being caught up in a pullback that could easily run 100+ pips. After the breakout below the 1.050 level, there has been a strong trend down that has been hard to fade. As expected, the market hit the 1.00 barrier and has absorbed the number with little pullback--as shown on the chart below. Once again we are looking to trade with the momentum on another break lower. Below you see the .9922 area as a point to watch for a short position. If the market can continue to sell off under that, our target is .9850 and .9970 area would be the stop loss area. There is strong sentiment the CAD will stay in the par area, so we are only looking for breakouts instead of trying to capture a long-term trend in these areas.

US Economy Update

2007-09-28T17:56:00.000+05:30

Global stocks are mixed but lower in Europe and the US today on news that Northern Rock Plc requested more emergency funds from the Bank of England. In Asia the Nikkei closed down -0.28%, Hong Kong closed up +0.29% at another record high, China closed +2.82% and Australia closed +0.45%. In Europe the DJ Stoxx 50 is trading down -0.32%.
The Financial Times reported today that Northern Rock Plc, a UK bank, approached the Bank of England for more emergency loans, rekindling concern about the credit markets. Northern Rock borrowed a further 5 billion pounds ($10 billion) from the central bank to stay in business, the Financial Times reported. The BOE agreed to bail out Northern Rock on Sep 14 after Northern Rock requested an emergency credit line after mounting losses associated with the subprime mortgage crisis made it increasingly difficult for the bank to operate. Northern Rock has now borrowed close to 8 billion pounds from the BOE since Sep 14.
China raised interest rates on some mortgages and increased minimum down payments to curb property speculation after real-estate prices rose last month at their fastest pace in more than 2-years. Loans for second homes and commercial sites will be charged 1.1 times the benchmark lending rates, up fom 0.9 times, and down payments will rise to 40%, from 30%, for housing loans and to half a property's value for commercial real estate. The PBOC is trying to slow a housing bubble as housing prices in 70 major cities rose 8.2% last month, the biggest gain since the government began the monthly survey in August 2005.
The research department of the PBOC also said today that they expect the economy to expand Core PCE deflator – Today’s Aug personal income and spending report is expected to show an increase of +0.4% for both series, following July’s report of +0.5% and +0.4%, respectively. The market will mainly be watching the Aug core PCE deflator, which is expected to ease to +1.8% y/y from +1.9% y/y in July. The FOMC last week cut the funds rate target by 50 bp to 4.75%, but the FOMC in its post-meeting statement had an inflation warning, suggesting that the Fed might not cut rates another notch without some further improvement in the inflation statistics. A decline in today’s core PCE deflator, which is the Fed’s preferred inflation index, would be a step in the right direction.
Chicago Purchasing Managers index – Today’s Sep Chicago purchasing managers index is expected to show a –0.8 point decline to 53.0, more than reversing the small +0.4 point increase to 53.8 seen in August. The purchasing managers survey is useful in the current environment since it gives some insight into whether business executives are panicking in the wake of the financial market crisis that started in early-August. So far, business executives seem to be taking the credit market crisis in stride, perhaps because the stock market has remained remarkably strong through the crisis.
US consumer confidence – The final-Sep US consumer confidence index from the University of Michigan is expected to show a small upward revision by +0.2 points to 84.0 from the early-Sep level of 83.8. The early-Sep level of 83.8 was up by +0.4 points from Aug, thus stabilizing after the sharp –7.0 point decline seen in August from the 7-month high of 90.4 posted in July. The markets are keying heavily on consumer confidence and spending in the wake of the credit market crisis, which began in early August11.6% this year, faster than earlier forecasts of 10.8% and consumer prices will rise 4.6% this year, up fom a previous forecast of 3.2%.
Core PCE deflator – Today’s Aug personal income and spending report is expected to show an increase of +0.4% for both series, following July’s report of +0.5% and +0.4%, respectively. The market will mainly be watching the Aug core PCE deflator, which is expected to ease to +1.8% y/y from +1.9% y/y in July. The FOMC last week cut the funds rate target by 50 bp to 4.75%, but the FOMC in its post-meeting statement had an inflation warning, suggesting that the Fed might not cut rates another notch without some further improvement in the inflation statistics. A decline in today’s core PCE deflator, which is the Fed’s preferred inflation index, would be a step in the right direction.
Chicago Purchasing Managers index – Today’s Sep Chicago purchasing managers index is expected to show a –0.8 point decline to 53.0, more than reversing the small +0.4 point increase to 53.8 seen in August. The purchasing managers survey is useful in the current environment since it gives some insight into whether business executives are panicking in the wake of the financial market crisis that started in early-August. So far, business executives seem to be taking the credit market crisis in stride, perhaps because the stock market has remained remarkably strong through the crisis.
US consumer confidence – The final-Sep US consumer confidence index from the University of Michigan is expected to show a small upward revision by +0.2 points to 84.0 from the early-Sep level of 83.8. The early-Sep level of 83.8 was up by +0.4 points from Aug, thus stabilizing after the sharp –7.0 point decline seen in August from the 7-month high of 90.4 posted in July. The markets are keying heavily on consumer confidence and spending in the wake of the credit market crisis, which began in early August

Energy Update

2007-09-20T16:35:00.000+05:30

Nymex crude noted modest fall to trade below $82 per barrel in the electronic trade session on Thursday after ending yesterday at a record high price after hitting a new intraday high of $82.51 per barrel. ICE Brent crude slipped below $78 per barrel today after ending higher for previous three trading sessions.

While profit booking may have brought a pause to the rally witnessed in last few days however keeping the losses in a check are steeper than expected decline in crude oil stocks following which pulled them to an eight month low and some storm concerns as a system developing in the Atlantic led to some evacuations from Gulf of Mexico oil platforms but only a minor halt in production. The Gulf of Mexico accounts for a quarter of US oil output.

The US National Hurricane Center said yesterday that disturbance along the east coast of Florida that may move into the Gulf Of Mexico could develop into a hurricane. This led BP PLC, Chevron Corp. and Marathon Oil Corp. and Royal Dutch Shell PLC to evacuate non-essential staff from the Gulf of Mexico while Exxon Mobil shut 1,000 barrels of daily crude oil production along with 55 thousand cubic feet per day of natural gas output

Also in background are refinery outages in Texas and California, concerns about conflict between Iran and the west over prior's nuclear research which resurfaced this week and expectations that the sharper than expected 50 basis point cut in US interest rates will be positive for economic growth, and therefore energy demand and will also pressure the dollar, which generally boosts the price of dollar-denominated oil and makes it cheaper, relatively, for holders of other currencies.

US crude oil stocks dropped 3.8 mn bbl to 318.8 mn bbl, gasoline stocks rose 0.4 mn bbl to 190.8 mn bbl while distillate stocks noted a build of 1.5 mn bbl to 135.5 mn bbl for the week ended Sept.14. Refineries operated last week at 89.6% of their capacity after operating at 90.5% in the previous week

US crude oil stocks fell for the fourth time last week and for the 10th time in past 11 weeks and was noted at the lowest level since the week ended Jan 5. Crude oil stocks dropped last week despite a rise in imports. Despite the 10% drop in past 11 weeks, crude oil stocks are at the upper end of the average range for this time of year however deficit over stocks a year ago widened to 3.9% last week.

Shanghai Copper Advances on U.S. Rate Cut; Zinc, Aluminum Gain

2007-09-20T16:27:00.000+05:30

Shanghai Copper Advances on U.S. Rate Cut; Zinc, Aluminum Gain

Copper rose in Shanghai on speculation demand for the metal will rise because this week's interest rate cut by the U.S. Federal Reserve will help contain a housing slump in the world's largest economy.

The Fed cut its benchmark lending rate on Sept. 18 by half a point, more than economists forecast, to 4.75 percent. Copper often moves in tandem with growth in major economies.
``At the back of people's minds, the credit and housing problems in the U.S. are far from over, but the larger-than- expected rate cut offers investors some psychological assurance, which is giving a boost to metal prices,'' Shen Xiaoqiang, research manager at Jian Zheng Futures Co. in Jiangsu, China, said by telephone today.

Copper for December delivery on the Shanghai Futures Exchange rose as much as 680 yuan, or 1 percent, to 67,730 yuan ($9,012) a metric ton, and ended the day at 67,220 yuan a ton.
The metal for immediate delivery in Changjiang, Shanghai's biggest cash market, gained as much as 1.4 percent to 67,390 yuan a ton.

``At these prices, activity in the physical market is not lively, but demand is expected to increase in the fourth quarter and people will buy then if they have to, whatever the price,'' said Shen.

London Metal Exchange copper for delivery in three months fell 0.4 percent to $7,855 a ton at 3:32 p.m. in Shanghai, after gaining 4 percent yesterday. December delivery copper on the Comex division of the New York Mercantile Exchange was down 0.2 percent at $3.5680 a pound, after climbing 3.7 percent to $3.5755 a pound yesterday.

U.S. Data

``The rally in the international markets yesterday was too exuberant, given that the economic data out of the U.S. last night was bearish for metals,'' Shen said.

Builders in the U.S. broke ground on 1.331 million homes at an annual rate, the Commerce Department said in Washington yesterday, the fewest in 12 years and less than economists had forecast. Builders are the largest users of copper in the U.S., the world's second-largest consumer of the metal.

``There is still no sign of either the housing market or the residential construction industry hitting bottom and starting to stabilize,'' John Kemp, a London-based analyst at Sempra Metals Ltd., one of 11 companies trading on the floor of the London Metal Exchange, wrote in a report yesterday.

Separately, U.S. consumer prices unexpectedly dropped 0.1 percent from July, the first decline this year, the Labor Department reported yesterday.

Other Metals

Zinc in Shanghai for November delivery rose 0.5 percent to close at 26,820 yuan a ton, and LME zinc was down 1.3 percent at $2,945 a ton at 3:37 p.m. Shanghai time. Shanghai December aluminum ended up 0.2 percent at 19,370 yuan a ton. LME aluminum was 0.4 percent lower at $2,473 a ton.

Among other LME-traded metals, nickel fell 0.4 percent to $33,650 a ton at 3:39 p.m. in Shanghai. Lead lost 1.1 percent to $3,200 a ton, while tin didn't trade in Asia after rising yesterday to $15,350 a ton.

Asia gold up in bullish mood

2007-09-20T16:22:00.001+05:30

Asia gold up in bullish mood

Spot gold rose in Asia Thursday but prices were rangebound after this week's sharp advances amid continuing bullish sentiment, traders and analysts said. Following the Federal Reserve's aggressive discount and fed-funds rate cuts, participants noted rising suspicion in the market that the impact from the subprime meltdown on the US economy may be stronger than expected.

The Fed's unanimous decision pointed to more bad news to come for the US economy, said Westpac Analyst Robert Rennie, with sky-high oil, gold and wheat prices leaving the Fed to face conflicting policy issues on further rate cuts and containing inflation. Gold built on the strongly positive lead from the Fed's cuts freeing up some liquidity and a strong rally by the Australian dollar, New Zealand dollar and euro against the US currency, said a Singapore-based trader.

Gold could easily breach Tuesday's high of $727 a troy ounce later in the trading day, particularly if the euro remains above $1.40 against the dollar, he said. But the increase in long positions in gold could result in some profit-taking, he added. Fat Prophets Analyst Gavin Wendt said the outlook for gold and oil was strongly positive, and retained a medium record price target of $1,000/oz for gold. US economic data will be keenly watched in the coming weeks for clues on US economic health, as will third quarter results from US banks, with Goldman Sachs due to report later Thursday.

"US housing starts weren't great, and inflationary pressures are on the up. But let's not forget that the Fed, now that it has moved to provide liquidity to the market, can always put rates back up," a trader said. Meantime, gold miners may increase the pace of de-hedging should prices rally above $730-735/oz, a Tokyo-based trader said, noting that Newcrest Mining has yet to buy back the remaining half of its hedgebook after the buyback of 2.3 million ounces earlier this month.

Other miners, foremost Barrick Gold and AngloGold Ashanti, still have large hedgebooks. "I'm not really sure they can stand aside or not. Those mining companies might cover their shorts quickly," he said.

US Economy Update

2007-09-19T22:03:00.000+05:30

Dollar continues to hover near record low against Euro after reportsshowing US CPI unexpectedly slowed in Aug and more than expecteddeterioration in the housing markets. Headline CPI fell -0.1% mom inAug, down from 0.1% mom in Jul and below expectation of being flat.This dragged the yoy rate further to 2.0%. Core CPI rose 0.2% mom,dragging yoy rate down to 2.1%. Housing starts decreased -2.6% to1.331, a 12 years low, while building permits decreased -5.9% to1.31m annualized rate, lowest since 95. Both are worse than market'sexpectation. USD/CAD recovers mildly from 1.0080 new 30 year lowtoday and continues to consolidate after report shows canadian CPIeased to 1.7% yoy in Aug. Still, the core CPI remained elevated at2.2%, though this was down from inflation in June and July.

Economist predicts housing downturn

2007-09-19T21:56:00.000+05:30

Economist predicts housing downturn

An economist who has long predicted this decade's housing market bubble would deflate said the residential real estate downturn could spiral into "the most severe since the Great Depression" and could lead to a recession.
Yale University economist Robert Shiller's comments came a day after the Federal Reserve responded to credit market turmoil by slashing the target federal funds rate by a half point to 4.75 percent.
Shiller, in testimony prepared for a hearing of the Joint Economic Committee said the loss of a boom mentality among the public "may bring on a further loss of consumer confidence." While he sees a "significant risk" of a recession within the next year, Shiller said actions by the Fed will lessen its severity.
Also in prepared remarks, Peter Orszag, director of the Congressional Budget Office, gave a more tempered forecast, saying that financial market turmoil and weakened consumer confidence "could pose serious economic risks" that are difficult to predict.

US Market Update

2007-09-18T18:48:00.000+05:30

UK stocks today are mildly higher (FTSE +0.27%) as the UK mortgage banking situation improved today. However, European stocks as a whole are trading slightly lower with the European DJ Stoxx 50 down -0.15%. Asian stocks today closed lower with the Nikkei index down -2.02%, Hong Kong down -0.09%, China down -0.40%, and Australia down -1.26%.
The UK mortgage banking situation improved today after the Bank of England yesterday pledged to guarantee the deposits in Northern Rock and any similarly-situated solvent bank. Northern Rock's stock today rose +10%, regaining some ground after falling 56% in the previous two sessions. Competitor Alliance & Leicester Plc, recovered by 26% today.
FOMC meeting – The FOMC meets today in the most-anticipated FOMC meeting in years. The October federal funds futures contract yesterday closed at a yield of 4.875%, which means that the market is discounting an average 4.875% funds rate during the month of October. Under normal circumstances that would mean the market is discounting a 100% chance of a 25 bp rate cut today and a 50% chance of a 50 bp cut. However, the Fed has been allowing the funds rate to trade at an average of about 20 bp below the official funds rate target. That means that the 4.875% level in the October fed funds futures market is also consistent with the idea that the Fed may only cut the official funds rate target by 25 bp to 5.00% but then allow the average daily funds rate to trade 12.5 bp below the new 5.00% target at 4.875%.
In any event, the market is expecting the FOMC in its post-meeting statement to adopt a bias toward easing and to perhaps provide some assurance that the Fed will provide liquidity to the banking system as needed to prevent any fresh crisis of confidence. The market is also expecting the Fed today to cut the
\n\t\u003cli\> The US stock and bond markets may show a knee-jerk negative reaction today if the Fed only cuts the funds rate by 25 bp since some vocal market commentators are calling for a 50 bp cut. However, FOMC members have shown a wide variety of opinions about the impact of the financial market crisis and it may be difficult to garner a majority vote for a 50 bp cut. The market therefore will not be particularly surprised by a 25 bp rate cut and a negative reaction may be short-lived since the markets can then at least be assured that the Fed will cut another 25 bp notch at the next FOMC meeting on Oct 30-31.\u003cp\>\n\t\u003cli\> PPI – Today’s Aug PPI report is expected to show a decline of -0.3% m/m overall and a small +0.1% increase excluding food and energy. That would follow the July report of +0.6% m/m overall and +0.1% core. On a year-on-year basis, the overall Aug PPI is expected to ease to +3.2% from +4.0% in July, and the core PPI is expected to ease slightly to +2.2% from +2.3% in July. The expected decline in the year-on-year PPI figures would help the Fed justify a rate cut today even though the negative effects of the mortgage and financial market crisis have yet to be seen in the real economy to a significant degree. The Fed will be putting aside any inflation fears it may still have at present in favor of a pre-emptive easing, but a decline inflation figures would nevertheless be helpful to the Fed’s cause.\u003cp\>\n\t\u003cli\> NAHB index – Today’s Sep NAHB housing market index is expected to fall -2 points to 20, adding to the -2 point decline to the 16-year low of 22 seen in August. The expected report today of 20 would match the record low for the series posted in Jan 1991 (the history of the series goes back to Jan 1985). The NAHB index measures the sentiment among US homebuilders on the single-family home market, with 50 being the demarcation between a “good” versus “poor” outlook for the single-family home marketplace. Today’s report for September will more accurately pick up the sentiment of homebuilders in the wake of the mortgage and banking crisis, which started on Aug 8 when BNP Paribas announced a halt of investor withdrawals from three of its investment funds.",1]
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5.75% discount rate by at least the same amount as the funds rate target. The Fed may even cut the discount rate by more than the funds rate target, creating a narrower penalty margin of the discount rate above the funds rate target. For example, the Fed could cut the funds rate target by 25 bp to 5.00% and cut the discount rate by 50 bp to 5.25%, thus narrowing the penalty spread to 25 bp. The Fed has been trying to encourage banks to borrow at the discount window if needed, but banks can only do that at a penalty of more than 50 bp at present.
The US stock and bond markets may show a knee-jerk negative reaction today if the Fed only cuts the funds rate by 25 bp since some vocal market commentators are calling for a 50 bp cut. However, FOMC members have shown a wide variety of opinions about the impact of the financial market crisis and it may be difficult to garner a majority vote for a 50 bp cut. The market therefore will not be particularly surprised by a 25 bp rate cut and a negative reaction may be short-lived since the markets can then at least be assured that the Fed will cut another 25 bp notch at the next FOMC meeting on Oct 30-31.
PPI – Today’s Aug PPI report is expected to show a decline of -0.3% m/m overall and a small +0.1% increase excluding food and energy. That would follow the July report of +0.6% m/m overall and +0.1% core. On a year-on-year basis, the overall Aug PPI is expected to ease to +3.2% from +4.0% in July, and the core PPI is expected to ease slightly to +2.2% from +2.3% in July. The expected decline in the year-on-year PPI figures would help the Fed justify a rate cut today even though the negative effects of the mortgage and financial market crisis have yet to be seen in the real economy to a significant degree. The Fed will be putting aside any inflation fears it may still have at present in favor of a pre-emptive easing, but a decline inflation figures would nevertheless be helpful to the Fed’s cause.
NAHB index – Today’s Sep NAHB housing market index is expected to fall -2 points to 20, adding to the -2 point decline to the 16-year low of 22 seen in August. The expected report today of 20 would match the record low for the series posted in Jan 1991 (the history of the series goes back to Jan 1985). The NAHB index measures the sentiment among US homebuilders on the single-family home market, with 50 being the demarcation between a “good” versus “poor” outlook for the single-family home marketplace. Today’s report for September will more accurately pick up the sentiment of homebuilders in the wake of the mortgage and banking crisis, which started on Aug 8 when BNP Paribas announced a halt of investor withdrawals from three of its investment funds.

LME Data

2007-09-17T13:32:00.000+05:30

COPPER: DOWN -2000
ZINC: DOWN -1500
ALUMINIUM : UP 6150
NICKEL: UP 774
LEAD: DOWN -675

Impact;
Positive for Copper, Zinc and Lead. Negative for Aluminum and Nickel

Currency Update

2007-09-17T13:02:00.000+05:30

Currency Update

The forex markets are quietly mixed in tight range as traders are preparing for tomorrow's FOMC rate announcement. Sterling continues to weaken across the board as BOE's bail out of Northern Rock continues to weigh on the currency. Former Fed chairman Alan Greenspan warned on an interview on Sunday that Fed should be cautious not to in lower interest rates too aggressively considering the risks of resurgence in inflation. Also, he expected that the slump in the housing market would likely deepen further that most expected and record as much as a double-digit drop. Markets have cooled down the speculations of a 50bps hike from Fed on Tuesday but opinions remain divided.

Weekly Currency and US Economy

2007-09-17T12:39:00.000+05:30

Weekly Currencies

The U.K. posted a favorable jobs report on Wednesday, showing a total of 31.69 million jobs, the most since records began in 1959. However, nerves were tested on Friday when the Bank of England said that it made an emergency loan to Northern Rock, the U.K.'s fifth largest mortgage lender. The Bank of England has maintained a stricter response to the subprime problems than either Europe or the U.S. and Friday's big drop in the pound hinted at the consequences of that policy. The December pound closed the week down 2.22 cents at $2.0049.

It was a tough week for the yen. On Monday, Japan's Cabinet Office reported that the economy contracted .3% in the second quarter of 2007, much worse than anticipated. Then on Wednesday, Prime Minister Shinzo Abe unexpectedly resigned from office and checked himself into a hospital for stress-related illness. The ruling Liberal Democratic Party will hold an election on September 19th to choose the next Prime Minister. In the meantime, the December yen finished the week down .0157 at .8784.

Australia is one economy that has slipped by most of the recent financial problems unharmed. The International Monetary Fund said on Thursday that they expect Australia's real GDP to increase 4.4% in the fiscal year that ends on June 30, 2008. The December Australian dollar climbed 1.62 cents to 84.02.

This week's China Watch showed that in August, consumer prices were at their highest level in 11 years, retail sales were up 17.1% from a year ago, and industrial production slowed slightly, to a 17.5% annual gain. On Friday, the People's Bank raised the one-year lending rate from 7.02% to 7.29%, the highest in nine years and the fifth increase this year. The government has also increased banks' reserve requirements seven times this year.

Weekly US Economy

Disappointment from last week's weak unemployment report hung over the markets again this week and Friday's report that August retail sales without autos were down .3% did not help. On the positive side, the University of Michigan's consumer sentiment index did improve slightly in September. The December U.S. dollar index was down .265 to 79.46, the lowest spot close in 15 years. The December S&P 500 gained 25.60 to 1,498.00 with high hopes for a federal funds rate cut on Tuesday.

With little economic news out this week, the market did hear some interesting comments from interviews with former Federal Reserve Chairman Greenspan. Among the highlights, he said that he did not recognize a serious problem in the subprime mortgage market until 2005 and he also said that Fed Chairman Bernanke has made the same decisions that he would have made, were he still in office. The June eurodollars were down .165 at 95.60. The December U.S. T-bonds ended the week down 15/32nds at 112.27/32nds.

Weekly Energy, Metals

2007-09-17T12:37:00.000+05:30

Weekly Energies

On Tuesday, OPEC threw the world a bone by announcing a 500,000 barrel per day production increase, but not until November 1st. The very next day, the Department of Energy said that U.S. crude oil supplies dropped 7.1 million barrels the previous week and gasoline supplies were down 700,000 barrels. It is very hard to see at this point how refiners are going to be able to increase heating oil supplies for winter without reducing record-low gasoline supplies even further. November reformulated gasoline climbed 5.40 cents to $2.0144.

Hurricane Humberto surprised investors by going from a tropical depression to a hurricane in just 18 hours and hit East Texas and Louisiana with heavy rain and damaging winds. There was no significant damage reported to the oil or gas rigs in the Gulf of Mexico.

The week for natural gas began with news that militants sabotaged six gas pipelines in Mexico and then the market absorbed concerns about Hurricane Humberto. Despite the shock, U.S. natural gas supplies remain high, at 3.069 billion cubic feet with another six weeks available to build supplies even more. November natural gas ended the week up 60.8 cents at $7.054.

Weekly Metals

On Thursday, GFMS, Ltd. said that world gold mine production was up 3% in the first half of 2007 from last year's low levels. Even so, they expect prices to stay high, averaging $690 in the second half of 2007 and working higher in 2008. December gold finished the week up $8.10 at $717.80, the highest spot close in over a year, with high hopes that the Federal Reserve will cut the federal funds rate when they meet on September 18th.

On Tuesday, copper prices got a lift after a report showed that China's copper imports were up 43% in the first eight months of 2007 from a year ago. Copper has been a little torn lately between strong economic news from China and weak economic news here in the U.S. By Friday afternoon, December copper had gained back last week's loss, closing up 14.10 cents at $3.3925.

US Data

2007-09-13T18:05:00.001+05:30

Us Jobless claims: +4k to 319k in sept. 8 wk: 325 Exp

Impact; Data is positive for dollar, negative for bullion.

Energy Update

2007-09-13T17:18:00.000+05:30

Energy Update :

Oct crude oil prices this morning are trading -15 cents and Oct gasoline is trading -1.13 cents. Some long liquidation pressure has emerged now that Hurricane Humberto made landfall last night with 85 mph winds but only caused heavy rain and flooding and only temporary disruptions to oil rigs, shipping, and refineries in the area.

Oct crude oil prices yesterday rallied $1.68 to a new record high of $79.91 and Oct gasoline rallied 3.49 cents. Bullish factors yesterday included Humberto, a new tropical depression in the east Atlantic, and a bullish DOE report. The market is watching a new tropical depression that is currently about 900 miles east of the Lesser Antilles and that is headed toward the Caribbean.

Yesterday's DOE report was bullish with a sharp 7.0 mln bbl drop in crude oil inventories (versus expectations for a 3 mln bbl drop), which left oil inventories 6.4% above the 5-year seasonal average, the least accommodative level in 4 months.

Meanwhile, gasoline inventories fell 666,000 bbl and are -4.7% below the 5-year seasonal average. Distillate inventories rose +1.8 mln bbl for the eighth consecutive weekly rise and are adequate at 1.0% above the 5-year seasonal average. Oil prices yesterday rose again despite OPEC's decision on Tuesday to raise its production quota by 500,000 bbl as of Nov 1.

India's gold demand low as bigger price falls eyed

2007-09-13T16:36:00.000+05:30

India's gold demand low as bigger price falls eyed

India's gold demand was low on Thursday as buyers waited for prices to ease further from their recent highs or stabilize to be able to make purchases, dealers said.

"There is a little bit of buying from those in dire need," said Ajit Shinde of Magna Projects Pvt Ltd in Kolkata, a large wholesaler. "But it should pick up for the festivals."

Shinde said for the time being, his clients, mostly in Kolkata, were willing to wait for a fall to 8,900 rupees per 10 grams.

Dealers in banks said demand was low with people hoping for a fall to $700 an ounce in overseas markets.

Foreign spot gold was down from Tuesday's 16-month high of $714.20, as the dollar, with which gold usually has an inverse relation, recovered against other currencies. It also eased on investor caution ahead of a U.S. interest rates meet next week.

A slightly stronger rupee helped lower Indian gold prices, but not enough to inspire many buyers, dealers in banks said.

India's busy season is currently on with Ganesh Chaturthi festival falling on Saturday. People, particularly in south India, usually buy ornaments for their idols or for themselves at this time of the year.

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LME Data

2007-09-13T15:26:00.000+05:30

LME Data:
Aluminum 894625 +3975
Copper 137075 -850
Nickel 28404 +660
Lead 23875 +100
Zinc 72975 -70

Impact: Data is positive for Copper and Zinc. Negative for Aluminium, Nickel and Lead

ECB says euro zone economic fundamentals remain strong

2007-09-13T15:04:00.000+05:30

ECB says euro zone economic fundamentals remain strong

The European Central Bank said euro zone economic fundamentals remain strong despite the recent turmoil in credit markets.

"Incoming macroeconomic data confirm the strong fundamentals of the euro area economy and support a favourable medium-term outlook for real GDP growth," the ECB said in its September monthly bulletin.

"Data on activity in the third quarter -- from various confidence surveys and indicator-based estimates -- remain favourable overall and support the assessment that real GDP is growing at sustained rates," it said.

Against this background of strong economic fundamentals, inflation risks are still tilted to the upside and interest rates therefore remain "on the accommodative side", it said.

The ECB left its main interest rates unchanged at 4.00 pct at last week's governing council meeting, citing uncertainty about the economic impact of the recent financial market turmoil.

"It is appropriate to gather additional information and to examine new data before drawing further conclusions for monetary policy," it said. But it said it will monitor all economic developments very closely and continue to pay close attention to developments in financial markets.

The ECB said inflation is likely to increase to levels above 2.0 pct in the months ahead from 1.8 pct currently. Strong money and credit growth continue to point to inflation risks over the medium to longer term, it said..

Commodities Market Commentary

2007-09-13T11:17:00.000+05:30

Copper stayed lower in early afternoon trade as investors took profits after yesterday's gains, with rising stockpiles and the easing of strike threats in Peru also depressing sentiment.

"After the extended rally seen on the run up to the close last night, prices have begun to take stock and profit taking has been in abundance from the beginning of the premarket session," said analysts at RBC Capital Markets. "Stock reporting rime showed net inflows for copper, aluminium and nickel, and outflows for the rest of the complex."

At 1.10 pm, copper for three-month delivery was trading at 7,401 usd against 7,475 usd at the close yesterday.

News that workers at Southern Copper Corp have called off a strike due for today after the company agreed to restart wage negotiations is also weighing on prices, analysts said.

Strike-related news had contributed strongly to yesterday's gains. Southern Copper is the world's fifth largest producer of copper. Its Ilo smelter and Cuajone and Toquepala mines have been plagued with strike action this year.

Meanwhile the LME said its stocks of the red metal increased by 650 tonnes this morning, bringing total LME monitored inventories to 137,925 tonnes, around 40 pct higher than they were two months ago.

Among other base metals, aluminium also dipped, helped by a sharp rise in LME monitored stockpiles. The metal slid to 2,444 usd from 2,460 usd yesterday. Inventories of the grey metal rose 6,000 tonnes this morning to 890,650 tonnes, according to the exchange. Stocks of the metal have risen by 5 pct in the last week.

Meanwhile lead, yesterday's strongest gainer, was steady at 3,020 usd against 3,030 usd at the close last night. The metal has been buoyed throughout the year by supply shortages from key producer Australian, and from China, after the imposition of an export tax on the metal earlier this year.

Nickel meanwhile inched up to 27,150 usd from 27,000 usd, and tin to 15,250 usd from 15,200 usd. Zinc was flat at 2,760 usd.

Gold hit a fresh 16-month high of 714.40 usd this morning after the dollar fell to an all-time low against the euro, and as the metal continued to attract support from inflation-hedging with oil prices close to record highs.

At 12.53 pm, spot gold was trading at 710.70 usd, an ounce against 711.80 usd at the close. Earlier, the metal touched a fresh 16-month high of 714.40 usd.

Among other precious metals, platinum was steady at 1,298 usd against 1,300 usd in late New York trade, while its sister metal palladium dipped to 331 usd from 333 usd. Silver was steady at 12.64 usd against 12.65 usd..

LME UPDATE

2007-09-12T13:31:00.000+05:30

Aluminum 890650 +6000
Copper 137925 +650
Nickel 27744 +498
Lead 23775 -125
Zinc 73675 -575

Impact; Data is positive for Zinc, Lead. Negative for Copper, Aluminium and Nickel.