MCX SILVERM November contract declines 1%

SILVERM prices on MCX were trading lower. At 15:22 hrs MCX SILVERM November contract was trading at Rs 63850.00 down Rs 638.00, or 0.99%. The SILVERM rate touched an intraday high of Rs 64385.00 and an intraday low of Rs 63850.00. So far 38053 contracts have been traded. SILVERM prices have moved down Rs 110.00, or 0.17% in the November series so far.

At 15:22 hrs MCX SILVERM February contract was trading at Rs 65597.00 down Rs 632.00, or 0.95%. The SILVERM rate touched an intraday high of Rs 66353.00 and an intraday low of Rs 65594.00. So far 2014 contracts have been traded. SILVERM prices have moved up Rs 10107.00, or 18.21% in the February series so far.

At 15:22 hrs MCX SILVERM April contract was trading at Rs 67101.00 down Rs 599.00, or 0.88%. The SILVERM rate touched an intraday high of Rs 67488.00 and an intraday low of Rs 67100.00. So far 117 contracts have been traded. SILVERM prices have moved up Rs 3022.00, or 4.72% in the April series so far.

Geojit Comtrade has come out with its report on spot Gold. According to the research firm, one can buy spot gold on dips to USD 1748 with stoploss of USD 1724 for a target of USD 1778.

Spot gold held firm near $1770 an ounce, buoyed by a strong dollar following actions taken by various central banks to urge growth in their economies. In an unexpected move, Bank of Japan increased the size of their asset prices to tackle slowing down of domestic economy, which supported the dollar. However, investors are anticipating more monetary actions from China in the face of recent bleak economic releases. Manufacturing activity in China contracted in September, a straight 11th month fall but slightly at a milder pace than August. The recent economic developments pushed the dollar index higher from its multi-month lows while the Euro eased down. The US Fed’s third round of quantitative easing and the bond buying plan by European Central Bank raised global inflation outlook. Concerns over inflation probably support bullion due to its inflation hedge appeal. Physical demand from India is expected to pick up in the coming sessions amid the key festive Diwali and marriage season. At the same time, investment demand for gold has been strong for the last week with the ETF holdings lifting to its all time highs.  The corrective sell off  witnessed in the previous session has failed to clear the strong support of $1748. As long as prices stay above, the same could signal chances of continuation of the broad bullish momentum. On a broad basis $1800-1820 regions look to be possible but evolving such a rally aiming the target is expected to face immediate resistance again at $1780. Unexpected fall below $1748 could test $1732 /1710 levels but major falls are not anticipated unless on a close below $1680 with adequate volume. Anyhow, for the day, prices are expected to take an initial dips probably near $1752 followed by a consolidation and drift higher. Volumes seem strengthening while the oscillators are still placed well above the zero line. An overbought condition in RSI and Bollinger Bands are supportive for weak sentiments in a very short term.
Trading strategies for spot gold:
Buy on dips to USD 1748, target USD 1778, SL USD 1724
Buy on dips to USD 1720, target USD 1742, SL below USD 1700.
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A.M. Kitco Metals Roundup:Gold Rallies Sharply on Weaker-than-Expected U.S. Jobs Report Friday September 07, 2012 8:48 AM

Comex gold futures prices have rallied sharply and hit a fresh six-month high in the immediate aftermath of a weaker-than-expected U.S. employment report. Before the report’s release gold prices were posting moderate losses on a corrective, profit-taking pullback. December gold last traded up $19.40 at $1,725.20 an ounce. Spot gold was last quoted up $23.40 an ounce at $1,725.25.  December Comex silver last traded up $0.716 at $33.41 an ounce.

The highly anticipated U.S. employment report for August came in weaker than expected on the non-farm jobs front, posting a rise of 96,000. Forecasts for the key non-farm payrolls figure were at up around 125,000. The overall unemployment rate did decline by 0.2% in August. The stronger ADP jobs figure released on Thursday had many thinking Friday jobs report would be stronger than the consensus forecast. Friday’s weak jobs report likely opens the door wide for a fresh U.S. monetary stimulus announcement by the Federal Reserve at its FOMC meeting in two weeks. Such would be bullish for the precious metals markets and other commodity markets, and that’s why gold and silver prices popped sharply higher following the jobs report.

In overnight news, European stock markets were firmer in the wake of the European Central Bank’s announcement of a fresh bond-buying plan Thursday. Spanish and Italian bond yields were down overnight, which suggests the European Union debt crisis is stabilizing. There was an upbeat economic report coming out of Germany overnight, as industrial output rose more than expected. Also, the Chinese government has announced a major infrastructure investment plan, in order to help reinvigorate its economy. Asian stock markets rallied on the China news and on the ECB stimulus plan.--Jim

The U.S. dollar index is solidly lower in early trading Friday, falling farther on the weak jobs report, and hit a fresh four-month low overnight. The greenback bears have the near-term technical advantage as a six-week-old downtrend line is in place on the daily bar chart. Meantime, crude oil prices are firmer Friday morning. Oil bulls still have the near-term technical advantage. These two key “outside markets” are in a bullish posture for the precious metals early Friday.

Other than the jobs report, there is no other major U.S. economic data due for release Friday.

The London A.M. gold fixing is $1,696.00 versus the previous A.M. fixing of $1,708.50.

NOTE: I am now providing you with unique analytical/technical charts on the 10 major world FOREX currency pairs. Holders of precious metals or other major tradable (fungible) assets worldwide need to monitor the foreign exchange rate of the currency in which their asset is held. Also, the precious metals market prices are impacted on a day-to-day basis by currency movements. If you have a better handle on what the major currencies are doing (or where they may be headed), then you will have more market knowledge and will likely become a more profitable investor or trader.—Jim

Technically, December gold futures prices Friday morning and hit a fresh six-month high and were scoring a bullish “outside day” up on the daily bar chart—whereby the high is higher and low is lower than the previous session’s trading range, with a higher last trade.
Gold prices are in a two-month-old uptrend on the daily bar chart. The gold market bulls have the solid overall near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at $1,750.00. Bears' next near-term downside price objective is closing prices below solid technical support at the August high low of $1,679.30. First resistance is seen at $1,740.00 and then at $1,750.00. First support is seen at $1,700.00 and then at the overnight low of $1,691.30.

December silver futures prices Friday hit another fresh five-month high and were also scoring a bullish “outside day” up on the daily bar chart. Bulls are in firm near-term technical command. Prices are in a six-week-old uptrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $34.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the August high of $31.315. First resistance is seen at $33.50 and then at $34.00. Next support is seen at $33.00 and then at $32.47.

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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

Market Commentary

Ø With New York closed there wasn’t much going on in precious metals yesterday

Ø Late buying continued into Asia and Gold fell only short of the 1700 mark on the December future.

Ø The Euro was strong following reports from ECB President Draghi, who told the EU Parliament that ECB purchases of sovereign bonds with up to 3-year maturities would not be considered to be state aid.

Ø Silver seems also unstoppable and next major resistance should be expected between 33.00 and 33.12.

Technical levels for 4^th Sep, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1675,1666,1658	1700,1705,1711
Silver	31.25,30.50,30.30	32.30,32.80,33.00

Economic Calendar:

Date		Economic Indicator	Country	Actual	Forecast	Previous		Effect & Remarks
4th Sep	ISM Manufacturing PMI		US	Pending at 7:30pm	50.0		49.8	If Actual > Forecast = Good for currency. Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
3rd Sep	ECB President Draghi Speaks		EU	NA	NA		NA	Draghi Told EU Parliament ECB Can Buy 3yr Bonds. European Union lawmakers risked a breach of confidence with the European Central Bank after revealing details from a confidential briefing with ECB President Mario Draghi.