Gold 31450/Silver 47945/ Crude Oil 3082/ Copper 326.45 /Soyabean 3792/
Commodity Round UP
Bullions
Gold stays near multi-year highs amid global stimulus prospects
Gold prices swung between small gains and losses in North American trade on Monday, staying close to a 28-month high amid speculation central banks in some of the world’s leading economies will step up monetary stimulus.
Britain's vote to leave the European Union last month has ramped up the urgency for central banks around the world to ease monetary policy in the near-term to counteract the negative economic shock from the Brexit vote.
The Bank of England could potentially cut borrowing costs and add to its asset-purchase program when it meets this week.
Meanwhile, in Japan, Prime Minister Shinzo Abe flagged a fresh fiscal stimulus packageafter his ruling coalition won a landslide victory in the Upper House on Sunday.
The coalition’s firmer grip means policymakers can more easily approve a bigger fiscal stimulus package to spur the economy. A stimulus package of at least 10 trillion yen ($97.9 billion) is expected.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
Market participants are also betting that the Federal Reserve would hold off on raising interest rates this year.
The precious metal is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Gold for August delivery on the Comex division of the New York Mercantile Exchange rose to a session high of $1,376.50 a troy ounce, less than $1.00 away from a more than two-year high hit last week. It last stood at $1,356.10.
Gold surged to $1,377.50 last week, a level not seen since March 2014, as uncertainty surrounding global growth in wake of Britain’s vote to exit the European Union sent investors flooding into safe haven assets.
Prices of the yellow metal are up nearly 30% so far this year amid fading expectations of a Federal Reserve rate hike and as expectations mounted that central banks around the world will step up monetary stimulus to counteract the negative economic shock from the Brexit vote.
Also on the Comex, silver futures for September delivery jumped 23.3 cents, or 1.16%, to trade at $20.33 a troy ounce during morning hours in New York, while copper futures advanced 4.3 cents, or 2.03%, to $2.162 a pound.
China published weaker than expected inflation data over the weekend, reinforcing views that more government stimulus steps will be needed to support the economy.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.
In the week ahead, market players will be turning their attention to key economic data out of China, with Friday’s second quarter GDP report in the spotlight.
Thursday’s rate decision and monetary policy meeting minutes from the Bank of England will also be in focus, amid mountings expectations for additional stimulus in wake of the U.K.’s Brexit vote.
In the U.S., investors will eye retail sales and inflation data to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.
This week also marks the start of the second quarter earnings season in the U.S.
Energy
Oil turns higher after falling to 2-month lows in choppy trade
Oil prices turned higher in choppy North American trade on Monday, after falling to a two-month low overnight amid signs of an ongoing recovery in U.S. drilling activity.
Crude oil for August delivery on the New York Mercantile Exchange fell to an intraday low of $44.53 a barrel, a level not seen since May 11.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by 10 last week to 351, marking the fifth increase in six weeks.
The renewed gain in U.S. drilling activity fuelled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
New York-traded oil futures sank $3.70, or 7.31%, last week, its biggest weekly loss in almost six months.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery tacked on 19 cents, or 0.41%, to $46.95, after sliding to a session low of $45.90, the weakest since May 11.
Last week, London-traded Brent futures dropped $3.84, or 7.13%, its worst weekly performance since mid-January, amid growing anxiety over the economic impact of Britain's vote to leave the European Union.
The news sparked concerns that Europe will fall back into recession, putting more pressure on the global economy and undermining future oil demand prospects.
In the week ahead, oil traders will be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Investors will also keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to gauge global supply and demand levels.
Market players will also continue to monitor supply disruptions across the world for further indications on the rebalancing of the market.
Natural gas futures edge lower as forecasts point to mild weather
U.S. natural gas futures edged lower on Monday, as updated weather forecasting models pointed to mild temperatures across most parts of the U.S. in the week ahead.
Natural gas for delivery in August on the New York Mercantile Exchange shed 1.9 cents, or 0.68%, to trade at $2.781 per million British thermal units .
Last week, natural gas futures declined 11.4 cents, or 6.23%, snapping a six-week win streak, as warm temperatures in key U.S. gas-consumption regions gave way to cooler readings.
Natural gas storage in the U.S. rose by 39 billion cubic feet last week, according to the U.S. Energy Information Administration, below forecasts for an increase of 43 billion. That compared with builds of 37 billion cubic feet in the prior week, 87 billion a year earlier and a five-year average of 77 billion cubic feet.
Total U.S. natural gas storage stood at 3.179 trillion cubic feet, 16.9% higher than levels at this time a year ago and 18.8% above the five-year average for this time of year.
Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.
Despite recent losses, prices are still up nearly 45% since late May as expectations have grown that hot summer weather will lead to heavy demand.
Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.
In the week ahead, market players will be focusing on weekly U.S. storage data on Thursday for fresh supply-and-demand signals. Some analysts believe this week’s storage addition will be less than usual for this time of year due to a recent burst of warmer-than-normal summer weather across most parts of the U.S.Gas futures jumped to $2.998 last week, the highest since May 2015, as hot summer temperatures across most parts of the U.S.
Base Metals
Base metals looking firmer, with copper joining in too
On Friday, the base metals closed mixed with copper and lead continuing to struggle, while the others closed up firmly, led by zinc’s 2.1 percent gain and nickel’s two percent gain. Copper was up 0.1 percent at $4,689.50 and aluminium closed up 1.3 percent at $1,660. Precious metals remained strong on Friday, closing with average gains of 1.3 percent led by a 2.8 percent rise in silver to $20.25, gold closed up 0.4 percent at $1,366.10.
Monday morning the base metals are up one percent on average with nickel up two percent at $10,065, copper is up 1.3 percent at $4,750, lead and zinc are up around 0.8 percent, while aluminium lags with a 0.2 percent gain. Precious metals are mixed this morning, with silver still steaming ahead, it is up 0.4 percent at $20.32, while gold prices are off 0.3 percent at $1,361.71 and the PGMs are off 0.1 percent.
In Shanghai, the base metals are up an average of 1.9 percent, led by gains of 3.6 percent in nickel, 2.7 percent in tin and 2.5 percent in zinc. Copper is up one percent at Rmb 37,600, while spot copper in Changjiang, is up 0.7 percent at Rmb 36,850-37,050. The spread has shifted to an equivalent of $80 contango, while the LME/Shanghai copper arb ratio is at 7.91, which should mean the arb window is open to some traders.
In other metals in China, iron ore prices ended the week around $55.20, steel rebar is up 0.8 percent, while silver is up 4.8 percent and gold prices are up 1.1 percent. In international markets, Brent crude oil price are off slightly at $46.50.
the dollar index is slightly firmer at 96.46, the post-Brexit high was 96.70, sterling remains weak at 1.2969, as does the euro at 1.1046, the aussie is firmer at 0.7559 and the yen has eased to 101.78. The yuan is weak at 6.6825 and the other emerging market currencies we follow are generally showing strength. The US employment report suggests the US economy is robust, but perhaps geopolitical issues will keep US rates on hold still – the best of both worlds for EM economies.
The economic agenda is light, on Sunday data was released on Chinese CPI and PPI, plus Japan’s machinery orders, machinery tool orders and M2 money supply. Later we get Italian industrial production and US labor market conditions index.
The base metals are looking firmer again, even copper, which suggests the consolidation of late has run its course and the rallies are well placed to continue. In recent weeks, zinc, nickel and tin have been setting fresh highs for the year, copper, lead and aluminium have not, copper is still a long way from doing so, while the others are closer to doing so. For now we expect the up trends to continue.
Gold
As expected... Below 31700 our target was 31380---31330. Just made a low of 31390
Now what to expect???
Support at 31380---31330. Break and sustain below 31330 will take to 30980---30930 mark. Further downside panic will see only close below 30930 mark else it could test its resistance level of 31600---31700 again
Further upside rally will see only close above 31700 mark
Trade with levels only
Silver
Support at 47450 and Resistance at 48300---48700
Still looks weak and could test 47450. Break and sustain below 47450 will see more downside panic till 46800---46500 and then to 45800 mark in days to come
Else it could test its resistance level of 48300---48700 again. Further upside rally will see only close above 48700 mark
Trade with levels only
Crude oil
Close above 3080 will take to 3150---3180 and then to 3250+ mark in days to come
Fresh selling can initiate only close below 3025
Copper
Above 327... rally remain continue till 330---332 and then to 338+ mark in days to come
Support at 323
Close below 323 will see further downside panic till 320---317 and then to 313 mark
Trade with levels only
Nickel
Told to fresh buy above 682.50 with stop loss of 660. Just made a high of 700.80
Now what to expect???
Two consecutive closes above 703 will see further upside rally till 725---740 and then to 780+ mark in days to come
Immediate support at 678
Lead
Told to buy above 123.50. Just made a high of 124.95 and now trading around 124.55
Close above 125 will see further upside rally till 126.50---128+ mark in days to come
Revise stop loss of 123.50
Zinc
Told to buy above 145.20. Just made a high of 146.55 and now trading around 146.25
Close above 145.20 will take to 147---148.50+ mark in days to come
Support at 143.40---142.80
