-- Posted Thursday, 16 May 2013 | | Disqus
Momentum is bearish but oversold conditions are there in gold and silver. Demand from Asia will be the key. Higher demand will limit losses in gold and silver. ETF outflows are still there. The US dollar will be the key in the absence of any news. The fall in US industrial production failed to lift gold and silver prices. Better to remain on the sidelines today.
Shell Targeted With BP in EU Price Fixing Probe for Oil – from Bloomberg news
Three of Europe’s biggest oil explorers are among companies being questioned by European antitrust regulators about potential manipulation of prices in the $3.4 trillion-a-year global crude market. Royal dutch shell plc, BP plc, statoil usa, and platts the oil-price data collector owned by McGraw Hill Financial Inc (MHFI)., said they’re being investigated after the European Commission conducted raids in three countries to ferret out evidence of collusion. Price fixing in energy markets has the potential to inflate production costs and consumer prices for everything from gasoline to airline tickets to cosmetics.
Energy Benchmarks: Statoil said the suspected violations relate to prices published by Platts. Platts publishes benchmarks prices that are used to determine the costs refiners pay for crude oil and distributors pay for diesel fuel and gasoline. Traders report transactions to Platts. Those deals, rather than a complete record of all trades, are used to determine the price. Total SA Europe’s third-biggest oil company, estimates that as much as 80 percent of all crude and oil product transactions are linked to reference prices such as those published by Platts, while as much as 20 percent are linked to exchange-traded futures on Nymex and ICE. Platts prices represent as much as 95 percent of crude transactions, 90 percent of oil products and OTC derivative transactions, according to Total’s estimates.
Our view on the above: Nothing much will happen. Just like Libor price manipulation these companies will be let off with very little fine. My experience analyzing commodities is that whenever a product or a commodity has huge demand in key emerging markets like China, India etc, prices have been artificially escalated by key manufacturers/producers. No action can be taken against these companies by governments in India and china as they fall under “too big to fail” category and have the patronage of their parent nation. The other day I was reading that Nokia was involved in a huge tax evasion case in India and the Finnish government intervened. Emerging markets leaders should be strong enough not to succumb to pressures from other nations in matter which are not strategic. The message should be operate as per our rules or stop operations. Others are waiting to grab your share.
RBI to launch inflation bonds to discourage gold imports
The Reserve Bank of India on Wednesday announced it will launch inflation-linked bonds every month, starting on June 4, to attract household savings of up to Rs. 15,000 crore this fiscal so as to discourage investments in gold.“RBI, in consultation with Government of India, has decided to launch Inflation Indexed Bonds (IIBs),” the central bank said in statement. The first tranche of the IIBs-2013-14 for Rs. 1,000-2,000 crore will be issued on June 4, it said, adding that the maturity period of these bonds will be 10 years. The total issue size will be Rs. 12,000-15,000 crore in 2013-14. While the first series of the bonds will be open for all class of investors, the second series issue - beginning October - will be reserved exclusively for retail investors. RBI said the bonds are pursuant to the Budget proposal to “introduce instruments that will protect savings of poor and middle classes from inflation and to save in financial instruments rather than buy gold.” Giving details of the first series of IIBs, RBI said while the coupon rate (interest rate) will remain fixed, the principal amount invested in the bonds will be linked to inflation based on Wholesale Price Index (WPI).
Our view: One should invest in the same but I am not sure if there are tax benefits also given.
Trading strategy for the very large traders and high risk traders
COMEX COPPER: Buy at $321-$322 stop loss $316 for $337 or buy over $328 stop loss $323 for $337.20-$343
NYMEX CRUDE OIL: Buy at $92.00 stop loss $90.30 for $96.00
COMEX TECHNICAL VIEW
COMEX COPPER JULY 2013 – current price $327.300
Bullish over $327.30 with $333.00 -$343.00 as price target
Bearish below $325.20 with $322.10-$313.80 as price target
Neutral Zone between: $325.20-$327.30
Break point: $327.30
- $322 is the key support and as long as copper trades over $322 the overall trend is still bullish
- There will be sellers only below $322.00
NYMEX CRUDE OIL (1ST CONTRACT) - current price $94.06
Bullish over $94.40 with $95.60 and $97.80 as price target
Bearish below $92.20 with $90.80 and $89.70 as price target
Break point: $94.30
- $92.20 price target achieved. Crude oil can rise to $96.00-$99.00 as long as it trades over $92.00
- There will be sellers only below $92.00
MCX COPPER JUNE 2013 – prices in Indian rupee below
Key support is at 387 and as long as copper trades over 387 the chances of a rise to 411-421 are higher. There will be another wave of selling only below 387.
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 Manan Somani
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, 16 May 2013 | Digg This Article
| Source: GoldSeek.com
