Commodity World 09-07-2014 …

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MCX Gold Aug 2014

Gold settled down -0.24% at 27490 slipped lower, after last week’s strong US employment data dashed the case for owning the precious metal. In some positive economic news last week, employment in the U.S. rose much more than anticipated in June, with unemployment rate dropping to its lowest level in almost six years, a Labor Department report showed Thursday.

Elsewhere, a Commerce Department report showed U.S. trade deficit to have narrowed more than expected in May, with value of exports rising and value of imports falling. Meanwhile, the European Central Bank kept its interest rates unchanged after its monthly policy meeting on Thursday, even though the region’s economy continues to lag. Nevertheless, geopolitical concerns over developments in Iraq and Ukraine continued to be a matter of concern, helping the precious metal stem and limit losses to a large extent.

Physical demand in top gold consumer Asia has also been weak as the metal is holding above $1,300. Many are waiting for a drop in prices before making any purchases. Meanwhile, gold is still seeing some safe-haven bids from geopolitical tensions in the Middle East and Ukraine. Also SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.8 tonnes to 798.19 tonnes on Monday.

Investors turned their attention to Wednesdays’ minutes of the Fed’s June meeting, with few other major U.S. economic reports on the calendar. Technically market is under long liquidation as market has witnessed drop in open interest by -0.16% to settled at 8687 while prices down -67 rupee, now Gold is getting support at 27408 and below same could see a test of 27325 level, And resistance is now likely to be seen at 27548, a move above could see prices testing 27605.

MCX Silver Sep 2014

Silver settled down -0.59% at 44780 held a retreat from a three-month high as investors assessed the timing of U.S. interest-rate increases. Bullion prices continued to slump after the Department of Labor reported last week that non-farm payrolls rose by 288,000 in June, easily surpassing expectations for an increase of 212,000. The dollar firmed on the news by stoking expectations for the Federal Reserve to hike interest rates.

However, by Monday trading after a holiday weekend in the U.S., profit takers wiped out the greenback’s advance, though gold prices remained in negative territory amid uncertainty as to when the Fed will move. Many investors jumped to the sidelines to await the release of the minutes from the Federal Reserve’s June policy meeting, which may hold clues concerning the direction of monetary policy.

U.S. investment bank Goldman Sachs said it expected the Fed to raise interest rates in the third quarter of 2015 as opposed to the first quarter of 2016 made in an earlier prediction, though uncertainty ahead of the release of the Fed minutes on Wednesday steered investors away from the bullion. In last few week’s Silver enjoyed a support pertaining to stronger investment demand compared to gold. Inventories in total known silver-backed ETFs climbed around 4.5% on a yearly basis compared to a 16% fall in gold holdings.

Some support seen on Rupee fall as investors turned cautious ahead of the upcoming federal budget this week while lack of dollar inflows due to the U.S. Independence Day holiday also hurt. Technically market is under fresh selling as market has witnessed gain in open interest by 0.63% to settled at 7831 while prices down -268 rupee, now Silver is getting support at 44588 and below same could see a test of 44395 level, And resistance is now likely to be seen at 44962, a move above could see prices testing 45143.

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