Friday, 30 March 2012

gold

Gold tested resistance at 1685 yesterday and started to drift lower for the rest of the day. Only in late trading large sell stops were triggered on moves below 1665 and 1660, as commodities in general saw pressure from risk reduction. Indian jewelers continued their strike, according to the All India Gems and Jewellery Trade Federation, 85% of the 300’000 Jewellers were still on strike. The Istanbul Gold Exchange reported a drop of 57% in year-on-year imports to 7.2 tons, due to a weaker Lira and higher international Gold prices. Bloomberg reported with a bit of delay Global Gold ETF holdings, which saw a drop of 3.8 tons. Silver implied volatilities continued to weaken, with the 6 month vol touching 32%, the lowest level in 13 months. We would still keep the USD index in focus, which has now tried the fourth time the support line. If this holds again, we would not be surprised to see a sudden jump higher to try and test resistances this time. Gold must hold 1650 today, while 1665 should provide first resistance. There will be option expiry on the GLD ETF tomorrow, where the largest open interest sits far away on the 150 strike (1544 spot) with 2.1 Mio. ounces of open interest. Closer strikes see 1.4 Mio. ounces on the 165 strike (1699 spot), but also 1.4 Mio. ounces on the 155 strike (1595 spot), while 1.1 Mio. are on the 160 strike (1647 spot). Depending on how the USD trades, 1600 or 1700 could therefore still get in jeopardy.

OUTSIDE MARKET DEVELOPMENTS:

Chinese stock prices remained under pressure overnight with fresh 2 1/2 month lows posted last night and that liquidation was partly macro economic in nature, but it was also the result of noted weakness in financial shares in that region. European stocks were also lower overnight, as a recovery attempt in mining shares reduced the initial losses in European stocks. However, the European markets were initially waiting for additional direction from an Italian debt auction results as the initial news of the auction results weren't conclusive. Ultimately yields from the Italian debt auction were lower, but those results didn't seem to have a definitively positive influence on global equity markets. US stocks were initially mixed overnight, with the trade generally downbeat on the track of the US economy and many traders were expressing concern from the lack of definitively clear policy hints flowing from the US Fed. The US economic report slate today contains initial and ongoing claims and a revision on an old US GDP reading. Expectations call for a minor rise in claims figures and a GDP reading around +3.2%. There will also be a corporate profits report out early today but that report probably won't have much of an impact on gold and metals prices. However, Italian debt yields might be a tone setting development early today, especially with the markets currently more conducive to slowing or anxiety news, than to positive news of lower Italian borrowing costs.
The gold market remains off balance after this week's high to low slide in prices of roughly $45 an ounce. The bull camp might point to an attempt to trade higher early in the trading session this morning, as a positive, but residual slowing fears in Asia, confusion on the near term direction of US Fed policy and a partial risk off vibe would seem to leave the bear camp with a minor edge. In fact, a minor upward revision to an old US GDP reading probably won't be enough to shift overall macro economic sentiment into positive ground. Therefore, initial and ongoing claims might take on some added importance this morning but those data points could be overshadowed if the US Fed dialogue this morning offers up fresh easing hopes. Gold saw a mixed influence from the overnight headline flow, as a major brokerage firm reduced its gold price forecast, while another entity suggested that gold prices would find support just under the current market from resurgent Indian gold demand. However, a continuing Indian jeweler strike has prompted some Indian gold buyers to stand back from the current market because of near term demand fears. At least to start, it would seem like ongoing fears of further slowing in Asia has put a cap over gold prices and therefore it could take a sweep of better than expected US numbers and perhaps even a distinct recovery in US equities, just to halt this week's pattern of declines on the charts. Comex Gold Stocks were 11.409 million ounces up 539 ounces. While we can't argue against more gradual downside erosion in gold prices, the June gold contract might have fairly solid support on the charts at $1,650. If one were to adjust the net spec and fund positioning in gold for the losses this week, it is possible that further liquidation in gold prices will end up putting the spec long positioning down to the smallest level since early 2009. However, seeing the gold market leveled technically probably doesn't do anything but reduce the magnitude of daily declines that should be expected, as long as global expectations are for more slowing in China and a nondescript economic track in the US. In conclusion, we can't argue against a temporary re-test of the mid March consolidation lows down at $1,644.50. However, on a slide down to that level, we would suggest that the bear camp will begin to see their risk rise rather significantly.

SILVER

The silver market is also showing some minor corrective bounce action this morning but outside market forces don't appear to be definitively supportive to start. However, May silver to the lows yesterday have already mounted a decline of roughly 43 cents an ounce and therefore some traders are suggesting that the gains this morning are simple technical short covering. With a negative ongoing vibe flowing from China and mixed global equity market action, the bear camp would seem to have maintained control over the physical commodity market trading environment. For silver to throw off this week's corrective bias, probably requires evidence of falling Italian debt yields, an as expected US GDP reading and perhaps better than expected US claims figures. Some traders are even suggesting that fear of a major environmental disaster from a North Sea natural gas platform accident is serving to keep global equities and physical commodity markets under pressure this morning. Other traders want to see clearly defined direction from the US Fed before they turn bullish toward silver and other physical commodity markets. Comex Silver Stocks were placed at 136.518 million ounces yesterday afternoon for a daily gain of 867,610 ounces. Comex Silver Stocks are now at the highest level since 10/03/2008. Silver stocks have increased 14 of the last 20 days. There might be little in the way of support in the May silver contract until the $31.78 level. Additional and slightly lower support is seen down at the March 23rd low of $31.45. Without a rise back above $32.32, the path of silver prices might continue to point downward. Ongoing weakness in energy prices might ultimately be supportive of the global economy and that could eventually be supportive of silver and other physical commodities. However, in the near term ongoing weakness in energy prices might simply foster deflationary vibes and in turn foster classic technical pressure in certain physical commodities.

PRECIOUS METALS RECAP 3/29/2012

April Gold closed up 3.6 at 1661.5. This was 17.2 up from the low and 3 off the high.

May Silver finished up 0.161 at 31.992, 0.108 off the high and 0.362 up from the low.

Gold and silver prices showed some divergence today, with silver at times outperforming gold. Clearly gold and other physical commodities were at least partially undermined by residual Chinese slowing fears but it is also possible that noted weakness in US equities and adverse currency market action served to give the bear camp in gold an edge. Ongoing declines in energy prices and harsh talk from the US Administration toward US Oil Company profits might have caused some spillover selling of gold today as persistent declines in energy prices could have a dampening influence on inflationary expectations.

The silver market waffled around both sides of unchanged this morning before giving wave to what appeared to be a broad based physical commodity market washout. However, silver managed to throw off a large portion of the bearish case ahead of mid session and it managed to return to positive ground. Therefore silver at times managed to outperform gold and the rest of the metals complex. On the other hand, May silver spent most of the trading session within relatively close proximity to the Wednesday closing level.

COMEX SILVER (MAY) 03/30/2012:

The next upside objective is 3275.0. The next area of resistance is around 3258.0 and 3275.0, while 1st support hits today at 3195.0 and below there at 3148.0.

COMEX GOLD (APR) 03/30/2012:

The near-term upside objective is at 1678.0. The next area of resistance is around 1671.4 and 1678.0, while 1st support hits today at 1651.6 and below there at 1637.9.

JUN GOLD

Resist: 1670.00, 1679.50, 1690.40*+
Supprt: 1653.90*-, 1642.90, 1628.30*
Comment: The rejection over 1690.40* is prompting a drop back against key 1653.90* support. A close under 1653.90* will rekindle bear trend forces for another drop against 1628.30 weekly support. Stable trade off 1653.90* for a few days should foster creeping rallies, but look for a close over 1690.40* or pop over Tuesday’s high to rekindle retracements to the 1729.40 swing target.

MAY SILVER

Resist: 32.40, 32.95+, 33.55*
Supprt: 31.79, 31.48
Comment: Overall the market is bearish. This week’s slip under 32.00- suggests a rejection of near term corrections. Suspect attempts to extend secondary selloffs and use a drop under 31.48 to rekindle the bear wave and release a wash to 30.62* support. Be alert for a bounce off 30.62*+/- on the first test. A close over 33.55* is necessary to mark a bottoming turnaround.

Market Commentary

Ø Gold opened unchanged at 1657.25/1658.25. Gradually rising on light buying after neutral jobs data, the metal reached an intraday high of 1663.50/1664.50 early morning. Quick profit taking after equities opened sharply lower and continued downward, took gold to its intraday low of 1645/1646 mid session. Struggling to regain lost ground as equities stabilized, the metal eventually ended the session at 1652.75/1653.75.

Ø Silver opened slightly higher at 31.89/31.94. An early morning gain to 32.08/32.13 was quickly erased as crude and then base metals turned sharply lower. Silver eventually reached an intraday low of 31.63/31.68 mid morning at which point base metals began to recover bringing renewed buying interest in silver. The metal eventually ended the session at 31.97/32.02.

Technical Commentary

Ø Gold closed lower today at 1653, the 3rd consecutive down session and close to our 1656 support level (the 50% Fibonacci retracement of the December to February uptrend). On the candlestick charts, we have the setup for a rising three methods, which is a tall white (up) candlefollowed by three small black real bodies within the range of the white candle. Confirmation would come from a tall white candle tomorrow which closes above 1690, which would be bullish. For now, the posture remains neutral with support at 1628, the last low.

Ø Silver formed a doji in the candlestick charts, closing close to unchanged at 32.02. A doji is a warning of a trend change, though not necessarily a reversal. Support is at 31.81, the 50% Fibonacci retracement of the December to February uptrend, followed by the last low around 31.11. Resistance is at the 38.2% Fibonacci level at 33.15. The Gold-Silver ratio is trading lower today at 51.64. The target remains52.97, the 50% retracement level of the drop from December to February.

Technical levels for 30^th Mar, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,640.75	1,679.70
Silver	31.594	33.732

Economic Calendar:

Date	Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
30^th Mar	Chicago PMI	USD	Pending at 9:45am	63.2	64.0	If Actual > Forecast = Good for currency. Level of a diffusion index based on surveyed purchasing managers in the Chicago area.
30^th Mar	Revised UoM Consumer Sentiment	USD	Pending at 9:55am	74.9	74.3	If Actual > Forecast = Good for currency. Level of a composite index based on surveyed consumers.
29^th Mar	Unemployment Claims	USD	359	351	348	As Actual > Forecast =Not Good for currency. The number of individuals who filed for unemployment insurance for the first time during the past week has Increased.

Disclaimer:

This report contains the opinion of the author, which is not to be construed as investment advices. The author, Directors, other employees of RiddiSiddhi Bullions Ltd. and its affiliates cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. The above-mentioned opinions are based on the information, which is believed to be accurate, and no assurance can be given for the accuracy of the information. The author, directors and other employees and any affiliates of RSBL cannot be held responsible for any losses in trading. In no event should the content of this research report be construed as an express or an implied promise, guarantee or implication by or from RSBL that the reader or client will profit or the losses can or will be limited in any manner whatsoever. Past results are no indications of future performance. Information provided in this report is intended solely for informative purposes and is obtained from sources believed to be reliable. The information contained in this report is no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. We do not offer any sort of portfolio advisory, portfolio management or investment advisory services. The reports are only for information purpose and are not to be construed as investment advices.

GOLD‏ (Spot) intraday:

SELL @ 1661 / 1658 , Stop at 1652 with 1670 & 1675 as next target.

The upside breakout of 1652 will open the way to 1645 & 1636

GOLD‏ (Spot) intraday:

BUY @ 1661 / 1658 , Stop at 1652 with 1670 & 1675 as next target.

The downside breakout of 1652 will open the way to 1645 & 1636

SILVER‏ (Spot) intraday:

BUY @ 32.20 / 32.06 , Stop at 31.95 with 32.38 & 32.62 as next targets.

The downside breakout of 31.95 will call for 31.67 & 31.38.

mcx gold

Above 28040 expect 28335,28415

Below 28040 expect 27925,27780

(INTRADAY: Moderate positive above (28040)

Action1: BUY @ ( 28190 / 28140 ) with stop (28040) for tgt=28335,28415

CURRENT RATE :

MCX : 28200

SPOT : 1664.00

INR : 51.12

DUTY : 109160

Thursday, 29 March 2012

Market Commentary

Ø Global weakness in equities overnight saw gold open lower at 1671.50/1672.50. Buying of the metal after positive manufacturing data took gold to an intraday high of 1677.50/1678.50 mid morning. Unable to hold onto the rally as the dollar gained, profit taking eventually took gold to its intraday low of 1654/1655 late in the session. Gold ended the day shortly after at 1657.50/1658.50.

Ø Silver opened lower at 32.40/32.45 with it reaching an intraday high of 32.48/32.53 mid day. Profit taking as base metals and crude made strong declines took silver to a late session low of 31.76/31.81. The metal ended the day soon after at 31.84/31.89.

Technical Commentary

Ø Gold is closing lower at 1659. The metal has fallen from yesterday’s 1696 high and looks poised to move back to last week’s low of 1629.The 1656 level represents the 50% of our three month 1523 to 1790 range. The lower major highs registered the past three weeks of 1790, 1716 and now 1696 are warning of another leg to the down side. We see 1608 as a critical pivot. This level represents the bullish trend support from the 3 year up move. Only a move back above 1696 will bring buyers back into market.

Ø Silver is weak today closing at current 31.99. Silver is also having a rough month with lower highs seen from 37.46 to 34.39 and yesterdays 33.18. We would expect fresh liquidation selling of Silver on a break of last week’s low of 31.13. The Gold Silver ratio has moved higher today to 51.86. Recent highs are seen at 52.06 with support near 50.54. It appears the risk for this ratio is a jump to 52.86 which is the 50% of our three month range.

Technical levels for 29^th Mar, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,644.75	1,686.67
Silver	31.494	33.877

Economic Calendar:

Date	Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
29^th Mar	Unemployment Claims	USD	Pending at 8:30am	351	348	If Actual < Forecast = Good for currency. The number of individuals who filed for unemployment insurance for the first time during the past week.
28^th Mar	Core Durable Goods Orders m/m	USD	1.6%	1.6%	-3.0%	As Actual = Forecast = Not impact for currency. Change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items.

Disclaimer:

APR GOLD

Resist: 1670.00, 1679.50, 1690.40*+
Supprt: 1653.90*, 1642.80, 1628.50*
Comment: The market tried to start a bottoming upturn, but the reluctance to hold over 1690.40* is prompting a drop back against key 1653.90* support. A close under 1653.90* will rekindle bear trend forces for another drop against 1628.50* weekly support. A bounce off 1653.90* should foster creeping rallies, but look for a close over 1690.90* or pop over Tuesday’s high to rekindle retracements to the 1729.40 swing target.

MAY SILVER

Resist: 32.40, 32.95+, 33.55*
Supprt: 31.85, 31.45
Comment: Overall the market is bearish. Yesterday’s slip under 32.00- suggests a rejection of near term corrections. A close over 33.55* is necessary to mark a bottoming turnaround. Suspect attempts to extend secondary selloffs and use a drop under 31.45 to rekindle the bear wave and release a wash to 30.62* support. Be alert for a bounce off 30.62+/- on the first test.

PRECIOUS METALS RECAP 3/28/2012

April Gold closed down 22.3 at 1662.6. This was 8.6 up from the low and 21.9 off the high.

May Silver finished down 0.785 at 31.831, 0.659 off the high and 0.066 up from the low.

The gold market at times was down by more than $20 an ounce from the prior close and it was also down as much as $36 an ounce below this week's highs. A combination of risk off, slack US data and spill over selling pressure from energies seemed to leave the bear camp with a distinct edge. Another element that probably contributed to the slide in gold prices today was a further deterioration in economic views toward the Chinese economy. While the bear camp didn't need additional ammunition, it is possible that weakness in the Euro provided an additional wave of gold selling today.

The silver market was down rather sharply to start today and it was clear that slack scheduled US data added to the downside track in prices. With noted declines in equities making the economic environment feel even worse there was no shortage of bearish factors weighing on silver and physical commodity prices today. While May silver initially managed to rebound from a sub $32.00 trade that level might be considered a critical pivot point for the trade in the coming trading sessions. Apparently talk of a possible strategic oil reserve release did little to underpin physical commodity markets and the equity markets today.

COMEX SILVER (MAY) 03/29/2012:

The near-term upside objective is at 3300.0. The next area of resistance is around 3245.0 and 3300.0, while 1st support hits today at 3159.0 and below there at 3125.0.

COMEX GOLD (APR) 03/29/2012:

The near-term upside target is at 1696.1. The next area of resistance is around 1677.5 and 1696.1, while 1st support hits today at 1647.6 and below there at 1635.8.

Wednesday, 28 March 2012

PRECIOUS METALS RECAP 3/27/2012

April Gold closed down 5 at 1680.6. This was 2 up from the low and 16.3 off the high.

May Silver finished down 0.134 at 32.616, 0.514 off the high and 0.041 up from the low.

The gold market initially managed an upside breakout on the charts before reversing course and sliding back into negative territory. Not surprisingly the US scheduled data prompted renewed fears of slowing and that in turn applied pressure to the Euro. With the US equity market also failing to hold a new high probe and in turn posting a somewhat negative chart pattern, one got the sense that overall macro economic expectations were deteriorating. In the end, weakness in the Euro and weakness in US equities seemed to give the bear camp in gold a green light throughout most of the Tuesday US trade.

While the May silver contract managed an initial new high move on the charts, prices reversed course into the US scheduled data window. With renewed fears of slowing fostered by the data flow and adverse currency market action, silver was seeing long profit taking from a number of different sources. In fact, noted weakness in copper prices seemed to provide silver with an added measure of pressure, as silver recently has tended to track with the industrial metals sector of the metals complex.

COMEX SILVER (MAY) 03/28/2012:

The next upside objective is 3340.0. The next area of resistance is around 3290.0 and 3340.0, while 1st support hits today at 3225.0 and below there at 3200.0.

COMEX GOLD (APR) 03/28/2012:

The near-term upside objective is at 1702.2. The next area of resistance is around 1689.4 and 1702.2, while 1st support hits today at 1671.7 and below there at 1666.2.

APR GOLD

Resist: 1690.20*, 1702.30, 1714.50-1717.10
Supprt: 1670.20-1669.20, 1662.50, 1653.90*

Comment: The recent rallies suggest a bottoming upturn and potential for a climb to 1729.40* resistance. A close over 1690.20* will confirm follow through rallies. However, the past two day fade over 1690.20* is cautioning for a slip back into corrective congestion, testing Monday’s upswing. Look for attempts to hold in the 1650’s and bounce back to rallies. A close under 1653.90* is needed to rekindle bear trend forces for another drop against 1628.50* weekly support.

MAY SILVER

Resist: 32.95+, 33.55*
Supprt: 32.15-32.12, 31.99, 31.45
Comment: Overall the market is bearish. Monday’s rebound started near term corrections that could extend into today. A close over 33.55* marks a bottoming turnaround. A rejection from 33.55* or another couple stalled congestion days under 32.95- could trigger secondary selloffs. Use a drop under 31.45 to rekindle the bear wave and release a wash to 30.62* support. Be alert for a bounce off 30.62*+/- on the first test.

Market Commentary

Ø Gold opened a little higher at 1687/1688. Early morning bullishness from good housing data and gains in equities had gold reach an intraday high of 1696.75/1697.75 just ahead of the P.M. fix. Profit taking as equities retreated coupled with gains in the dollar took the metal to an intraday low of 1680/1681 mid session. Staying near the lower end of the range for the remainder of the day, gold eventually closed the session at 1685/1686

Ø Silver opened almost unchanged at 32.77/32.82. Gaining alongside an early morning rise in base metals and crude, silver eventually reached an intraday high of 33.11/33.16 mid morning. Profit taking quickly took the metal lower with it eventually reaching an intraday low of 32.57/32.62. Silver ended the session soon after at 32.61/32.66

Technical Commentary

Ø Gold closed close to unchanged today at 1685. Support sits at 1656, the 50% retracement of the December to February up-trend. Resistance is at the last interim top, 1717 and a close above that level would bring in more buyers.

Ø Silver closed slightly lower at 32.66. For the past few weeks, silver has traded sideways with 33.15 providing resistance – this is the 38.2% Fibonacci retracement of the December to February up-trend. We would need to close up through this resistance to turn from short-term neutral to bullish. Support is at 31.11, the last interim low. The Gold-Silver ratio is trading higher at 51.7.

Technical levels for 28^th Mar, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,671.59	1,694.64
Silver	32.330	33.030

Economic Calendar:

Date	Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
28^th Mar	Core Durable Goods Orders m/m	USD	Pending at 8:30am	1.6%	-3.0%	If Actual > Forecast = Good for currency. Change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items.
27^th Mar	CB Consumer Confidence	USD	70.2	70.3	70.8	As Actual < Forecast =Not Good for currency. Level of a composite index based on surveyed households has Decreased.