COMMODITY NEWS AND TRADING LEVELS FOR 9TH MAY 2012

Commodity Trading Levels

COPPER (JUNE) – European debt crisis woes resurfaced into the global financial markets. The political and economic turmoil in the European countries propelled investors to sell off the risky assets and favoring the safe haven dollar. Greece elections were creating major riots in the financial markets. But, the fleeted glimpse of jump in factory orders of Germany solacing metals from its huge fall. The decline in LME inventories of Copper might curb huge losses in the metal. Expected resistance and support level for today trade are as follows:

TREND CONSOLIDATE

SUPPORT 1: 431.35

SUPPORT 2: 455.85

RESISTANCE 1: 441.75

RESIST ANCE2: 445.15

CRUDE OIL (MAY) – Japan is reportedly considering to provide sovereign guarantees to its oil tankers so that it could continue importing oil from Iran after the EU sanctions comes into effect on July 01, 2012. Japan is Iran's major customer. India' crude oil imports reached 172.11MMT in 2011-12, with a 5% increase from that of 163.59 MMT in 2010-11. Expected resistance and support levels for the crude may contract with expiry date of 19 MAY 2012 are:

TREND BEARISH

SUPPORT 1: 5075

SUPPORT 2: 4995

RESISTANCE 1: 5305

RESISTANCE 2: 5415

GOLD (JUNE) – Removal of an excise tax on gold by the Indian government is a step toward recovery of Indian gold demand. Resistance and support levels for the today’s session for Gold June contract which will expire on June 2012 are:

TREND CONSOLIDATE

SUPPORT 1: 28485

SUPPORT 2: 28310

RESISTANCE 1: 28760

RESISTANCE 2: 28855

SILVER (JUL) – The increasing industrial use of silver will help the metal outperform gold when it comes to precious metal investments, as the supply/demand fundamentals point to a continued scarcity of silver and ensure a shortage of supply in future which will end in the higher silver bullion prices. Silver’s Expected resistance and support levels for today trade are as follows:

TREND BEARISH

SUPPORT 1: 55005

 SUPPORT 2: 54910

RESISTANCE 1: 55275

RESISTANCE 2: 55385

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Market Overview

Monsoon, which promises to be good, may be a while away. For nowdark clouds are hovering over the Mumbai skyline this morning.The markets of course are confronting their own set of headwinds – both domestic as well as foreign. The deferment of GAAR by a year was expected to be a short-term catalyst to support the market mood. However, stocks, currency, bonds or commodities – everything was in the red. The only safe haven seems to be US dollar (despite a sluggish economic recovery). The risk-off trade is likely to persist for a while before there is any material relief. 

On the domestic front, the RBI has hinted that it has limited room to perk up the mood. So, it is pretty clear that the Government must move quickly to give a much-needed fillip to the economy. We expect another weak start owing to a worldwide depression in the market. There might be an intraday turnaround but don’t get trapped in it as the bias remains negative for now.

The Indian markets confirmed a trend reversal with a formation of ‘bearish engulfing line’ on candlestick. The Nifty closed near the lowest point of the day. This has reinforced a negative for our market with immediate support seen at ~4925 levels.

Daily Commodity News Bulletin

The BSE Sensex and NSE Nifty started of trade marginally lower on Wednesday following weak European cues. The Indian rupee too fell 0.5% in early trade to 53.54 a dollar.

Gold:

Precious metals like gold and silver are trending down in early morning trade on Wednesday at the Multi Commodity Exchange of India (MCX) on increasing indications that Greece may pull down the Eurozone into a deep crisis.

Silver:

The increasing industrial use of silver will help the metal outperform gold when it comes to precious metal investments, as the supply/demand fundamentals point to a continued scarcity of silver and ensure a shortage of supply in future which will end in the higher silver bullion prices, says the recent article in financial site Penny Stocks Detectives.

Copper:

The London Metal Exchange (LME) has in an update said that it has received a number of acquisition proposals which are now being examined by the Board of LME.

Crude oil:

Saudi Arabia, one of the world's leading oil producer, is ready to increase its oil output if its customers request so, the country's oil minister Ali Naimi stated.

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