Trump has done it once again !He Pulls the mat under the climate accord and now is in a select group with Syria and Nicaragua who are not signatories to this agreement between 195 nations. This has led to large scale selling in Crude oil as production could start in areas where it was previously protected. Data yesterday was very favorable for a rise in price but mercurial Trump does it again ! I think we need to be on our toes till his term ends in 2020 as not only is he unpredictable but also stubborn in nature.Gold has remained on the softer side on the back of stellar numbers reported in ADP Non Farm Employment Change , although the all important data of Non Farm Pay Rolls is due today and a repeat of yesterday’s performance could bring in sharp corrections in Gold and silver. Iron ore and re bar have been sold and are now at close to levels which is technically important in the medium term. ANZ has reiterated that they have negative expectations of the Australian GDP. Metals are looking increasingly ‘ stressed ‘ as macro picture once again comes to the fore and UK elections predicting a hung parliament .Today should be very volatile as we have week end and NFP data , also we will follow Trump on Twitter.
Zinc has been the laggard with sellers aggression seen in the counter and poor price action. Technically a very weak close with prices failing to get any kind of momentum.Spreads have remained on the offered side. Inventory has seen a uptick . There has been reports that imported zinc has reduced the demand for the metal in China in the short term as physical demand remains weak. We need to closely watch 2515-2520 levels as a failure to defend these would likely make the metal test this year’s low made earlier in May. (2459.5 ) On the upside the spade work is difficult to cross for now as prices need to cross and close above 2580 to make the bulls interested again.
Support 1 – 2515-2517 ( strong zone and good support area )
Resistance 1 – 2550 ( will act as resistance now )
Support 2 – 2485 ( basis 17 Nov’16 low )
Resistance 2 – 2577 ( looks unlikely but is today’s high )
Lead did show some strong buying against the odds but was sold into the 2nd ring close. Passive buying seen in the counter throughout the day.Inventory has seen declines. Spreads however has remained very well offered in the counter. The point to worry has been it’s continuous failure to move above the 2130 mark. On the downside 2070 acts as major support for the counter. Open interest has seen a rise indicative of longs being established ? Technically a very good close .
Support 1 – 2070 ( remain very strong level in the medium term )
Resistance 1 – 2110 ( Remain well supplied at these levels with lot of material changing hands )
Support 2 – 2043.5 ( basis 18 May’17 low and this year’s low )
Resistance 2 – 2130 ( strong mid term resistance level )
Aluminium was very well bid with buyer’s aggression seen in the counter. It did break past 1941 at one point in time but failed to cross beyond that. Inventory has been rising .Technically a good close. Spreads remain very well bid . There has been reports that the production capacity cuts announced by China last year have re started again as environmental checks are over and are close to 2016 levels. Trump has reiterated in his comments that he wants to improve aluminium and steel sector and it remains a priority for him .Alumina prices are on the rise after declining this year.
Support 1 – 1909 ( basis 31 May’17 low )
Resistance 1 – 1936 ( had provided resistance initially this month )
Support 2 – 1900 ( remain psychologically important )
Resistance 2 – 1944 ( yesterday’s high )
Nickel remains in the tight grip of the bears with seller’s aggression pretty evident . Every price rise has been met by strong selling in the counter. Spreads remain well offered . Physical delivery from LME controlled warehouses. It has gone past the 8820 lows made earlier and is now trading at this year’s low . This is looking technically very weak and poor price action coupled with break down of major levels suggests further erosion of prices is quite possible .If on the long side I would wait for 8500 for entering the metal and if short than 9000 still remain a strong sell for now.
Support 1 – 8705 ( basis 07 June’16 high )
Resistance 1 – 8790 ( basis 24 June’16 low )
Support 2 – 8610 ( basis 08 June’16 low )
Resistance 2 – 8830 ( today’s high )
Copper was very well bid with buyer’s aggression seen in the counter. However there has been strong selling in the counter since morning. Grasberg union has decided to prolong the strike for now. The failure of the metal to cross 5720 -5725 zone has attracted scale down technical selling. It has so far held last week ‘s low of 5602 and a break below that could attract selling in the metal. Inventory had seen a rise. Technically a very strong close . Spreads however remain offered.
Support 1 – 5600 ( remain strong mid term support for the counter )
Resistance 1 – 5650 ( will act as strong resistance in the short term )
Support 2 – 5575.5 ( basis 18 May’17 low )
Resistance 2 – 5688.5 ( today’s high )
Tin had a positive price action with buying seen in the counter. Inventory has once again seen declines. Backwardation has reduced in length. Technically a strong closing though is weak today along with the rest of the metal pack. As reiterated earlier the failure of the metal to cross 20500 could attract technical selling.
Support 1 – 20200 ( first area of support )
Resistance 1 – 20415 ( Today’s high )
Support 2 – 20000 ( technically and psychologically important )
Resistance 2 – 20500 ( remain strong mid term resistance )
On the macro economic parameter Euro zone PPI came in below expectations. Later in the day in US we have Non Farm Pay Rolls ,Trade Balance and ISM -NY Business Conditions. Today before the Fed meet this is a major data that can impact the Fed decision in the medium term . However volatility will remain in the market and we could see some profit taking from the bears which could propel the markets higher.
WISH YOU LUCK FOR THE NEXT WEEK !!!