-- Posted Thursday, 1 November 2012 | | Disqus
Executive Summary
· The US October non farm payrolls report tomorrow is the key.
General market conditions
The recent consolidation phase in gold and silver will pave the way for big moves by tomorrow. The Chinese official purchasing managers index rose in October after a period of two months which suggests that there will be more growth over the coming months. Base metals will be supported at lower prices. Traders will start taking positions for the US October non farm payrolls tomorrow and the US presidential elections next week.
Damage assessment of the US economy will dictate commodities and equity markets for the next week. France and Germany could clash over the European Union budget. There will also be fireworks from Europe over the next couple of weeks.
Trading strategy for the very large traders and high risk traders
COMEX COPPER: Buy on dips with a stop loss below $345 for the short term.
NYMEX CRUDE OIL: Buy on dips with a stop loss below $83.00
US dollar-Indian rupee (usd/inr) – inter-bank trend
The price movement of usd/inr is a very important factor in determining the direction of MCX commodities. Technically there is congestion between the 54.45-54.76 zone and as long as usd/inr does not break it will fall to 53.6900 and 53.2500 in the short term. Only a break of 54.76 will result in further weakness for the usd/inr to 56.00. Fundamentals are still below expectations for the Indian economy. The diwali sales will give us more view of the state of consumer spending in India. In the short term we prefer to use a cautious stance on the usd/inr while in the medium to long term we prefer to use a sell on rise strategy with a stop loss of 57.50 and a price target of 51.50 and 49.80. One year forward premium is around 290 paisa. Speculators of rupee should sell usd/inr forward for a period of six months as forward premiums should fall after Diwali once the liquidity improves. We also expect the reserve bank of India to cut interest rates by 0.25% in the January meeting and by another 0.25% in the April meeting as cyclical factors along with lower global crude oil prices will bring Indian inflation down.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared by Chintan Karnani
Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.
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NOTES TO THE ABOVE REPORT
PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
APPROPRIATE STOP LOSSES PER LOT IN US DOLLARS ON THE TRADING CALLS GIVEN IN THIS REPORT
COMEX GOLD – $15-$17
COMEX SILVER: $25-$30
COMEX COPPER: $3
NYMEX CRUDE OIL: $0.60
SPOT SILVER: $0.25
SPOT GOLD: $15-$17
THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
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-- Posted Thursday, 1 November 2012 | Digg This Article
| Source: GoldSeek.com
