Commodity World 17-07-2014 ….


MCX Gold Aug 2014

Gold settled down -0.41% at 27648 tracking weakness from Comex Gold which ends below $1,300 after Janet Yellen’s testimony. Gold prices have fallen for a second day, after some mixed economic data from the U.S. and hawkish remarks from U.S. Fed Chair Janet Yellen, following the precious metal’s sharp plunge yesterday with investors booking profit on recent gains. Gold futures turned negative after Fed Chairman Janet Yellen told Congress that the Federal Reserve may raise interest rates sooner than earlier forecast if improvements in the U.S. labor market are sustained.

“If the labor market continues to improve more quickly than anticipated by the Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned,” Yellen said in prepared remarks to the Senate Committee on Banking, Housing, and Urban Affairs. In some mixed economic news from the U.S., retail sales in June rose less than expected, with business inventories also improving less than expected in May. Nonetheless, business conditions for New York manufacturers improved significantly for a third consecutive month in July, reaching its highest level in more than four years.

Since Monday, gold futures plunged nearly 3.5 percent with investors opting to book profit on recent gains made by the precious metal and the low physical demand for gold. Meanwhile Holdings of SPDR Gold Trust, rose to 808.73 tons on Tuesday, from its previous close of 800.05 tons. Technically market is under long liquidation and getting support at 27508 and below same could see a test of 27367 level, And resistance is now likely to be seen at 27869, a move above could see prices testing 28089.

MCX Silver Sep 2014

Silver settled down -0.13% at 44854 as the outlook for higher borrowing costs in the U.S. strengthened the dollar and damped demand for an alternative investment. Bullion extended Monday’s 2.3 percent loss, its biggest daily drop since December, as fading fears over Portugal’s banking sector prompted investors to take profits, triggering stop-loss orders. Yesterday Yellen told the Senate Banking Committee earlier that rates are likely to remain on hold for a considerable period after the bank’s quantitative easing program ends, though her observation that small-cap, biotech and other momentum stock valuations appear “stretched” gave the dollar support, leaving investors to conclude that interest rates could rise sooner than later if the labor market improves, which sent bullion falling.

Yellen’s comments overshadowed mixed U.S. data, which depicted an economy that continues to recover albeit on a road with lingering potholes. The Commerce Department reported that U.S. retail sales rose just 0.2% in June, below forecasts for a 0.6% increase. Retail sales for May, however, were revised up to 0.5% from a previously reported 0.3%. A separate report showed that manufacturing activity in New York state rose to a four-year high this month.

The Empire state manufacturing index rose to 25.6 in July from 19.3 in June. Meanwhile Holdings in total known ETFs backed by silver still remained up 3.6% year-to-date even despite a mild decline thought the last month. Technically market is under long liquidation as market has witnessed drop in open interest by -7.94% to settled at 7128 while prices down -58 rupee, now Silver is getting support at 44547 and below same could see a test of 44239 level, And resistance is now likely to be seen at 45217, a move above could see prices testing 45579.

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