8 FEB – 12 FEB 2016
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W E E K L Y
R
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P
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T
Blow by Blow
On
Bullions,
Base metals,
Energy…
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MAJOR EVENTS Precious metals may perform on a positive note with promises of price rise in 2016,
according to the London Bullion Market Association(LBMA) survey. “Contributors to
the 2016 Forecast Survey are predicting price increases across the board for all four
metals,”
The survey contributors foresee modest increase of 1.1% in the gold price and a more
bullish outcome for the white metals with price increases of 5.4% for both silver and
platinum and a more significant increase of 12.7% for palladium prices. This year
LBMA analysts are more bullish about the prospects of precious metal prices than
they were in last year’s survey. Whilst analysts are bullish this is only expected to be a
partial recovery with prices of all four metals forecast to be some way below last
year’s highs.
This is largely driven by steady performance following the December FOMC, severe
tensions over the equity market sell-off and demand for safe havens against FX
volatility and geopolitical concerns.
WTI Oil plummeted over 6% during trading on Monday with prices edging closer to
$31 as tepid manufacturing data from China, the world’s largest energy consumer,
renewed fears that demand may be dwindling.
These anxieties added to the rapidly fading expectations around OPEC cooperating
with Russia to curb production, while ongoing concerns over the excessive oversupply
of oil in the markets continued to haunt investor attraction. Although there was some
initial optimism directed towards Russia’s willingness to slash production, Saudi
Arabia remained defiant on the idea of any cuts, while Iran had already pledged to
pump up to 1.5M barrels a day in a mission to reclaim its lost market share.
The visible clash of interests from various cartel members combined with an
appreciating Dollar has added to oil’s woes consequently obstructing any opportunity
for a recovery in prices. WTI remains firmly bearish and this horrible combination of
record high productions, a heavily saturated oil markets and fears over sluggish
demand should encourage sellers to attack oil prices towards $30.
WTI Crude Oil
remains firmly
bearish on China
threat.
Global Zinc market
to grow to
19.19MMT by 2020
in terms of
consumption.
In terms of consumption, the global zinc market was 15.8 million metric tons in 2015,
and this will increase to 19.19 million metric tons by 2020, growing at a CAGR of
3.96%.
The global zinc market is highly fragmented, with primary and secondary smelters
accounting for 56% of the market. China was the global leader in the manufacture of
zinc in 2015. Other prominent suppliers of zinc are Australia, India, South Korea,
Japan, and Latin America. “Even though smelting capacity is high, the actual supply of
zinc will be lower than the rated capacity due to the depletion of mines. This will
negatively impact the zinc supply in Southeast Asia and the EU. Smelters around the
world have been facing a supply deficiency since 2011,” as per the report.
This has resulted in reduced capacity utilization in production plants. Capacity
expansions will be done on a large scale by smelters in China during the forecast
period. Expansion project investments (both Greenfield and Brownfield) will be
carried out in countries such as South Korea, Japan, Kazakhstan, and India to increase
smelting capacity.
Precious metals
offer bright
prospects in
2016.
E C O N O M I C C A L E N D E R
DATE & TIME DESCRIPTION FORECAST PREVIOUS
Feb 8 8th-12th Mortgage Delinquencies 4.99%
8:30pm Labor Market Conditions Index m/m 2.9
Feb 9 4:30pm NFIB Small Business Index 94.6 95.2
8:30pm JOLTS Job Openings 5.54M 5.43M
8:30pm Wholesale Inventories m/m -0.1% -0.3%
Feb 10 8:30pm Fed Chair Yellen Testifies
9:00pm Crude Oil Inventories 7.8M
11:31pm 10-y Bond Auction 2.09/2.8
Feb 11 12:30am Federal Budget Balance 10.3B -14.4B
7:00pm Unemployment Claims 287K 285K
8:30pm Fed Chair Yellen Testifies
9:00pm Natural Gas Storage -152B
11:31pm 30-y Bond Auction 2.91/2.3
Feb 12 7:00pm Core Retail Sales m/m 0.0% -0.1%
7:00pm Retail Sales m/m 0.1% -0.1%
7:00pm Import Prices m/m -1.4% -1.2%
8:30pm Prelim UoM Consumer Sentiment 92.6 92.0
8:30pm FOMC Member Dudley Speaks
8:30pm Business Inventories m/m 0.1% -0.2%
8:30pm Prelim UoM Inflation Expectations 2.5%
S1 S2 S3 R1 R2 R3
26950 26485 26090 27835 28180 28510
S1 S2 S3 R1 R2 R3
35300 34500 33700 36100 37100 38000
T E C H N I C A L V I E W
MCX GOLD showed bullish movement
as it gave a breakout of inverse head
and shoulder pattern on daily chart
and found important resistance of
27600. Now, if it continues this bull
rally on higher side then it may find
next strong resistance of 28270. And
on lower side 27000 will act as vital
support level below which may again
drag towards the support level of
26500.
S T R A T E G Y Better strategy in MCX GOLD is to buy
above 27600 for the target of 28250,
with stop loss of 26900.
PIVOT TABLE
G O L D
PIVOT TABLE
S I L V E R
T E C H N I C A L V I E W
MCX SILVER last week showed strong
movement on higher side and gave
breakout of important resistance level
of 35300 and closed near to 61.8%
retracement level. Now, for upcoming
sessions 36100 is act as resistance for it
maintain above this resistance it may
find strong resistance of 37000. On
other hand 35300 will act as important
support level.
S T R A T E G Y Better strategy in MCX SILVER at this
point of time is to buy above 36100 for
the target of 37000, with stop loss of
34900.
C R U D E O I L
C O P P E R
S1 S2 S3 R1 R2 R3
2030 1900 1800 2345 2570 2760
S1 S2 S3 R1 R2 R3
312.30 303.95 296.25 321.65 329.85 338.60
T E C H N I C A L V I E W
MCX Copper last week showed bullish
movement, broke trendline act as
resistance for it, also closed above it
and found resistance of 23.6%
retracement level on daily chart. Now
322.50 will act as immediate
resistance for it above this 330 is next
resistance. Closing below 310 again
drag it towards major support level of
300 and continue its major trend.
S T R A T E G Y Better strategy in MCX CRUDEOIL is to
sell below 2020 for the target of 1800,
with stop loss of 2350.
PIVOT TABLE
T E C H N I C A L V I E W
MCX Crude oil showed sideways
movement, found resistance of
upperband of downward channel
pattern on daily charts and closed
around it. Now, 2350 is act as vital
resistance for it above which breakout
of channel pattern is expected and
may find next resistance near 2475. On
lower side closing below 2030 may
again drag it towards major support
level of 1900.
S T R A T E G Y Better strategy in MCX COPPER is to sell
below 310, with stop loss of 323 for the
targets of 300-295.
PIVOT TABLE
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