Friday, 31 October 2014

Gold falls below $1,200 after Federal Reserve Chair Janet Yellen comment and upbeat U.S. GDP data; Gates are open to touch $1100 in next quarter.







From last few trading sessions we have seen pressure in Gold from last few trading session as Federal Reserve Chair Janet Yellen showing confidence in US economy. Gold prices have fallen below $1200 on Friday as the metal continues to lose ground to the broadly-stronger US Dollar. In the Asian session, the spot price per ounce stands at $1195, marking a three-week low.  The US dollar gained about 100 points on Wednesday, boosted by a hawkish Fed policy statement. The Fed said that the labor market is strengthening and inflation remains on target, although it did note that the labor market participation rate remains low. As expected the Fed completed the taper of its QE3 program. The asset-purchase program was initially started in 2008, at the height of the economic crisis, in order to boost a weak US economy. The termination of the QE is a symbolic step which is a vote of confidence from the powerful Fed that the US economy is on the right track. From data front showed that the U.S. economy grew more than expected in the third quarter. The Commerce Department said gross domestic product grew at a seasonally adjusted annual rate of 3.5% in the three months ended September 30, above expectations for growth of 3%. Separate data showed that the number of individuals filing for initial jobless benefits increased by 3,000 last week to 287,000 from the previous week’s revised total of 284,000. Jobless claims have held below the 300,000-level for seven consecutive weeks, indicating that the recovery in the labor market is gaining momentum. Meanwhile, investors adjusted to a future without large scale asset purchases from the Federal Reserve. The U.S. central bank ended its monthly bond-buying program, known as quantitative easing, in a widely expected decision at the conclusion of its two-day policy meeting on Wednesday. The Fed retained its commitment to keep interest rates near zero for a “considerable time," but sounded more hawkish on the labor market, saying that “under utilization of labor resources is gradually diminishing.” Prior statements from the Fed described the slack in the jobs market as "significant." The US dollar index, which tracks the performance of the greenback against a basket of six major rivals, surged to a three-and-a-half-week high, as market players brought forward expectations of when the Fed would eventually raise rates. A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. On the other side, US durable goods looked dismal in September. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was a second straight decline, and missed the estimate of 0.4%. There was much better news from CB Consumer Confidence, as the indicator climbed to 94.5 points, up sharply from 86.0 points. This easily beat the estimate of 87.4 and marked a 7-year high. An increase in consumer confidence usually translates into stronger consumer spending, which is a critical component for economic growth.

Technical view


Technically, Gold has support $1180 and resistance at $1220. Below $1193 will see panic till $1187---$1180. Three consecutive closes + weekly close below $1180 will see nonstop panic till $1153---$1141 in days to come. On Monthly chart, Gold is forming wedge pattern and monthly close below $1180 will take Gold to $1050---$980 in coming weeks. On other side, Dollar index is trading around 86.50. It has support at 84.80 while resistance at 86.80. Still it looks positive and could test its resistance. Close above 86.80 will see sharp upside rally till 91.00---93.50+ mark in days to come. Yellow metal almost traded inversely with dollar Index. Recovery in global markets will keep pressure in bullion markets. 






On MCX division, Gold has support at 26300 and resistance at 26850---27200. Two consecutive closes below 26300 will take to 25700---25300 and then to 24800 mark in days to come. Traders can sell Gold on rise around 26850 with stop loss above 27200 on closing basis for the initial target of 26300. On Monthly chart, Gold has major support at 24800 level and resistance at 27650. Negative RSI on monthly and weekly chart is at 45 while daily stand at 50 which indicate that gold remain under pressure for time being and then consolidate at lower levels. Here, USDINR plays key volatility on MCX division. USDINR has support at 61.40---60.70 and resistance at 62.50. With seeing positive momentum in equity market along with lower crude oil prices will keep pressure on USD against INR and INR will appreciate in near terms. Below 61.40 will see panic in USDINR till 61.00---60.70. Three consecutive closes + weekly close below 60.70 will see free fall in USDINR till 59.80---59.30 mark in days to come and this helps to maintain pressure in commodity. Fresh buying can initiate only above 62.50 level. Chances are bright to move gold towards south direction until and unless any major news comes from developed economics. So at this stage, any sharp rise will be best selling opportunity in gold but trade with levels only. 


Recommendation

Traders can sell Gold (MCX) around 26800---26850. Stop loss 27200. Target 26300





































More will update soon...

Update on Gold, Silver, Copper and Nickel











Enjoyed crash in Gold and Silver or Not??? Minted money in base metal too... Just trade with levels only






Have a look on it!!




Gold





1000 points crash in less than 48 hours.. Tonnnneeeees of money minted in this week. Hope you all enjoyed a lot???

We recommended selling in Gold around 26900. It crashed vertically and made a low of 26000. Our target was 26300---25800

Now what to expect???


Sustain below 26000 will see further panic till 25800---25700 mark. Two consecutive closes below 25700 will see further panic till 25300---24800 mark in days to come


Else it could test its resistance level of 26300 and then to 26500---26850 again

On Comex division... Today's close below $1180 will see nonstop panic till 1140---1125 and then to 1080 mark

On rise sell it!! Positional stop loss above $1220 on closing basis





Silver




Crashed vertically and made a low of 35539. Below 37450... our target was 36200---35500. Holding short from 37900 level

On Comex division too indicated to sell below $17.00 with stop loss of $17.60. It crashed and made a low of $16.00. 

Now what to expect???

Weekly close below 35500 will see further panic till 34600---33800 mark in days to come

Positional traders holding short can revise stop loss of $17.00 INR 37300 on closing basis

Others can trade with levels only





Copper





Support at 417 and Resistance at 421---424

Above 421 will see upside rally till 422.50---424 mark. Three consecutive closes + weekly close above 424 will take to ???

Else it could test its support level of 417 again. Close below 417 will see further panic till 414.50---412 level

Trade with levels only and wait for conformation





Nickel (Nov)




Support at 940 and Resistance at 975. CMP 990

Two consecutive closes above 975 will take to 1005---1030+ mark in days to come else it could test its support level of 940 again

Further panic seen only weekly close below 940 mark

 Traders can buy Nickel in panic around 980---970 with stop loss of 940 on closing basis

Others can trade with levels only







































More will update soon...

Currency Outlook - Europe CPI Flash Estimate and India Fiscal deficit for Apr- Sep will be key factors for FX market today..






USDINR

Yesterday carry forwarded sell call hit first target of 61.65, initiated at 61.81. Near term resistance is seen at 61.95 levels and a break above it will expect USDINR to test 62.27 levels else short term

On the other hand, dollar index rose to over three week high and traded at 86.29 yesterday after the Fed revised its estimate for interest rate hike. Today, a possible upward move towards 86.30-86.40 levels could be expected with support level of 85.90.

Traders may hold sell call for target 61.55 then 61.45 with revise stop loss of 61.75.(CMP 61.6325).


EURINR

Sell call given below 77.88 was success full with pair drop towards 77.62. Below 77.50 can add/hold for target 77.25 and below with revise stop loss of 77.62.  

Euro/dollar settled at $1.2612 compared to previous close of $1.2636/euro. The pair rose to as high as $1.2639/euro in intraday trades and fell to $1.2581/euro, lowest since Oct 7. Today, it may show $1.2513 next support levels. 

GBPINR

GBPINR witnessed biggest losing streak in the week settled with loss of 0.52% at 98.82 levels. Near term trend still looks negative unless it gives a closing above 99.30 and above it possible trend reversal could be expected towards upside level of 99.50- 99.80 levels.

Sell call given at 98.81 was successful with pair drop towards 98.5450.. Traders may sell below 98.52 for target 98.25 then 98.10 with stop loss of 98.64.

JPYINR


Today, a bunch of economic data and Bank of Japan policy may have strong impact on JPYINR.

 Sell strategy given from 56.70 was successful with pair hit 56.36 recent low second target is at 59.35.

 Below 56.35 hold/add for 56.20/56.00 with revise stop loss 56.45 (CMP 56.3925).


Major Economic Data & Events Schedule today

Time
Currency
Economic Indicators
Forecast
Previous
Possible Impact
Tentative
JPY
Monetary Policy Statement
-
-

10:30am
JPY
Housing Starts y/y
-17.10%
-12.50%
Negative
11:30am
JPY
BOJ Outlook Report
-
-
-
Tentative
JPY
BOJ Press Conference
-
-
-
12:30pm
EUR
German Retail Sales m/m
-0.80%
2.50%
Negative
1:15pm
EUR
French Consumer Spending m/m
-0.30%
0.70%
Negative
2:30pm
EUR
Italian Monthly Unemployment Rate
12.40%
12.30%
Positive
3:30pm
EUR
CPI Flash Estimate y/y
0.40%
0.30%
Positive

EUR
Core CPI Flash Estimate y/y
0.80%
0.80%
Neutral

EUR
Unemployment Rate
11.50%
11.50%
Neutral

EUR
Italian Prelim CPI m/m
-0.10%
-0.30%
Negative
6:00pm
USD
Core PCE Price Index m/m
0.10%
0.10%
Neutral

USD
Employment Cost Index q/q
0.60%
0.70%
Negative

USD
Personal Spending m/m
0.20%
0.50%
Negative

USD
Personal Income m/m
0.30%
0.30%
Neutral
7:15pm
USD
Chicago PMI
60.2
60.50
Negative
7:25pm
USD
Revised UoM Consumer Sentiment
86.4
86.40
Neutral

Impact: High Low Medium







More will Update soon... 

Thought for the day