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BULLION
A few weeks back, Commodity Online noted of
a decoupling in gold and silver as the US economy
showed signs of recovery. Well the coupling is back as
investors abandon gold and silver futures in droves as
they move to other asset classes like equities.
The latest episode of gold and silver downturn is being
witnessed as US new home sales data in US climbed 2.1%
to a seasonally adjusted annual rate of 476000 units and
the S&P/Case-Shiller Index of home prices in different
U.S. metros climbed to 12.1% in April.
Last week only, Ben Bernanke of US Federal Reserve
hinted of putting an end to QE measures by next year.
This sparked a downtrend which was hardly seen in
recent times.
Macro economic indicators suggest that US Dollar may
gain strength as the months progress riding on growth
expectations in US. This may prove to be bearish for
silver and gold.
“The coupling between gold and silver has been there for
a long time primarily because of the investment demand
that characterizes both commodities. The decoupling,
however occurred as silver industrial demand too played
a hand. Now, the industrial demand is taking a backseat
as silver futures follow gold in heavy sell-off,” said John
Godson, Technical Analyst with Commodity Online.
Silver on the Comex for delivery on September 13 was
seen trading at $18.985/oz, a loss of $0.567 or 2.90% as
of 10.49 AM IST. Gold, meanwhile has lost close to 2%.
MARKET NEWS
ENERGY
The trend in crude oil futures for July delivery on India's
Multi Commodity Exchange (MCX) looks sideways for the
day. Traders are advised to wait till the release of weekly
US crude oil inventory data which is scheduled to be
released at 08.00 PM IST by Energy Information
Administration (EIA). The inventory data is expected to
be positive for the crude oil prices. “For intra-day,
support for the commodity is seen at 5700 while
resistance is seen at 5840. If prices break the level of 5840
then prices are expected to move towards 6000.”
“Traders may take buy position above 5840 with the stop
loss of 5800 for the target near 5900 and above that it
may touch level of 6000.
MCX crude oil futures for July delivery was seen trading
up by 1.70% at Rs.5789 per barrel as of 05.22 PM IST on
Wednesday. In the global market, Brent crude oil prices
fell on Wednesday after US data boosted the Dollar.
A positive US data also supported the speculation that
US Federal Reserve may stop pumping money in to the
economy. Meanwhile, US crude oil stockpiles declined by
28,000 barrels for the week to June 21, according to the
data released by the American Petroleum Institute (API).
WTI crude oil futures for August delivery on NYMEX was
seen trading down by 0.47% $94.88 per barrel as of 05.38
PM IST on Wednesday. Brent crude oil futures for August
delivery on NYMEX was seen trading down by 0.10%
$101.20 per barrel as of 05.39 PM IST on Wednesday.
.
BASE METAL
Copper prices on London Metal Exchange (LME)
declined on concern that less than expected economic
growth in China the would damp the base metal
demand. LME prices were seen trading at $6695 down
by around 1 percent.
Copper futures for September delivery on Globex
platform of Comex was seen trading down by 1.48% at
Rs.3.032 per pound as of 01.39 PM IST on Wednesday.
Persisting cash crunch in China and less than expected
economic growth around the globe are putting
pressure on the base metal prices to certain extent in
the global market.
However, in the United States, a latest report
indicated improvement in single-family home prices,
which indicates growing potential for commodities.
The latest data by S&P showed that home prices
climbed more than forecast in the 12-months ending
April, showing the most gain since more than seven
years and showing further strength in the US housing
market. The S&P/Case Shiller composite index of 20
metropolitan areas rose by 1.7 %, against the forecast
of 1.2%.
According to the agency, the property prices in the 20
cities of US increased 12.1% on year-on-year basis
from April 2012, highest gain since March 2006.
Copper on the Comex for delivery on September 13
was seen trading at $3.058a pound, a gain of $0.029 or
0.96% as of 04.50 PM IST.
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