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Web Special: Evening commodity update

SI Reporter/Mumbai 20 Jun 12 | 06:04 PM

As markets anxiously wait for the US FOMC rate announcement and post announcement press conference later tonight, expectations are high that the central bank may provide additional stimulus measures to support the flagging economy. Shares rose and commodities steadied ahead of the highly awaited event. Meanwhile, euro gained against the US dollar on hopes that the Fed may resort to monetary easing in the midst of faltering economic growth and worsening debt crisis in Euro Zone. Spot gold traded mostly steady in thin ranges today after posting its first decline in more than a week during the previous session. In the mean time, spot gold continued to consolidate, looking out for fresh cues for further directional moves. Base metals were steady to negative in LME and Shanghai market. LME copper inched lower ahead of the US FOMC rate decision as investors remained wary of Spain’s worsening financial condition. Crude oil dipped in Nymex after rising the previous session while Brent crude oil slipped towards 17 month low levels. Intensifying worries over Spain and flattering global economic outlook weighed on the over all market sentiments. However, fall in crude oil inventories and monetary stimulus hope arrested fall. API data eeleased earlier today reported a decline in crude oil inventories. EIA data is also anticipated to show a draw in crude oil inventories. Back home, in MCX, precious metals and crude oil traded moved flat in narrow ranges while base metals swung between positive and negative territories. Nickel gained the most rising more than 0.5 per cent.

Events in Focus


Market emotions remained subdued ahead of the much anticipated U.S FOMC rate decision, later in the evening. Amid a string of disappointing economic numbers off-late and an escalating debt crisis in Europe threatening recovery for the U.S economy, the Federal Reserve FOMC meeting would be keenly looked at in anticipation that the Federal Reserve announces a new round of extraordinary monetary stimulus, such as big purchases of bonds to revive stalling U.S economic situation. The department of Energy crude inventories slated for release in the evening is estimated to show a fall in levels. With crisis in Europe taking leaps and turns, European finance ministers would be meeting up in Luxemburg on Thursday to discuss the European crisis and evaluate the Greek election outcome. Also, topping the agenda would be enhancing the firepower of the EFSF. Overall, volatility is likely to the byword this week with markets expected to vacillate over events surfacing in Europe and the U.S. As a market watcher, the week could see financial markets at the whim of Europe and the Fed.

Technical Commentary

GOLD Mini
MCX June


Prices have been consolidating in a tight range without much direction. Even in this perplexing situation, break above 30240 region could inveigle fresh buying towards 30360/ 30500 or even higher towards 30700. But failure to break 30240 region could liquidate buying sentiments and find support at 29980/870 or even lower towards 29700.

SILVER Mini
MCX June


Prices likely to congest inside the broad trading range of 55350-54000 levels initially, but any of the side breakout would suggest fresh directional moves later. Direct rise above 55350 will be an early signal of short covering rally towards 56100/57000 levels. Falls below 54000 ,projected downside objective is 53350.

COPPER
NCDEX/MCX June


Previous attempts to break the key upside level of 423-424.50 was unsuccessful and prices pried trading with mild negative bias. The day, if unable to break the key upside of 424.50 we would see corrective selling probably towards 421/417 level. Conversely, direct rise above 424.50 will give signals of strong rallies.

NICKEL
MCX June


Early dips probably find support near 946-944 and likely for a turn higher towards 965-967 levels, which if cleared will take prices higher towards 988. Prices have to close below 923 could provide signals of selling pressure.

CRUDE OIL
NCDEX/MCX June

 
The auxiliary positive bias is facing resistance at falling trend line level of 4755 region. If trades are able to sustain above this echelon with burly volumes, could see prices inching higher towards 4775/4815/4845 levels. In ability to clear, could call for liquidation initially towards 4720/4685-65. A close above 4800 mark for the day could be a sign of a broad trend reversal in favor of bulls.

Source: Geojit Comtrade

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