capitalaim commodity report

1. Weekly Newsletter Commodity- 24 July 2017 24 July 2017

2. support@capitalaim.com FOCUS OF THE WEEK Narrowing yield differentials between US bonds and those of other major economies are prolonging USD's weakness. The Fed increased interest rates twice this year, in March and in June, and the dot plot accompanying the June meeting statement continued to project one more rate hike for the rest of the year, followed by three rate hikes in 2018. However, we acknowledge that some market participants have started to doubt whether there will be one more hike this year. Indeed, BNP Paribas has just revised its forecast, projecting no more rate hike for the rest of the year while Goldman Sachs is factoring in 60% chance of one more rate hike through 2017. These indicate that the market had turned more dovish over the Fed monetary policy outlook, although the central bank has tried to go further by discussing about balance reduction. Diminished optimism of US' growth is a key reason for the more dovish expectations. The Trump administration has failed to announce any concrete plan to implement the President's pro-growth promise (including tax reform and infrastructural spending). Ironically, the lawmakers have failed for several times to pass the new healthcare reform bill, although both chambers of the Congress, namely the House of Representatives and the Senate, are controlled by Republicans. This evidenced the internal conflicts of the Republican members and the lack of leadership of the President. Meanwhile, the government is entangled with the scandal of Trump family's association with Russia and the latter's possible intervention of 216 US Presidential Election. Testimonies and investigations have occupied most of the Congress' time, at the expense of debates of the pro-growth policies. The latest news of the political drama is the resignation of the press secretary Sean Spicer, in protest over the appointment of Anthony Scaramucci as the new White House communications director. The focus of the week is the FOMC meeting due Wednesday. The dilemma facing the Fed is the continuation of moderate growth and labor market improvement on one hand, and the subdued inflation on the other hand. We are interested to see how the Fed would described the inflation weakness of late, especially of it would continue to described the softness as "transitory". Special attention is also paid on any more detail on the timing of an announcement on the beginning of balance sheet normalization. Besides the FOMC meeting, Fed Governor nominee Randall Quarles is having his confirmation hearing on Thursday and Minneapolis Fed President Neel Kashkari is due to speak on Friday. Commitments of Traders: With the exception of gasoline, speculators were bullish over the energy complex in the week ended July 18. Net LENGTH for crude oil futures increased +38 434 contracts from a week ago to 396 459. NET LENGTH of heating oil added +2 147 contracts to 9 097while net LENGTH for gasoline dropped -127 contracts to 49 480. Net SHORT for natural gas decreased -122 contracts to 60 138for the week. Speculators were mixed over the precious metal complex last week. Net LENGTH for gold fell -122 contracts to 60 138, while that for silver futures plunged -4 629 contracts to 9 376. For PGMs, net LENGTH for platinum rose +3 144 contracts to 8 541 while that for palladium added +455 contracts to 19 099. www.capitalaim.com

3. support@capitalaim.com BULLION GOLD For the 24 hours to 23:00 GMT, the Gold rose 0.71% against the USD and closed at USD1255.8 per ounce on Friday, as the US Dollar weakened against other currencies amid current political crisis in the US. In the Asian session, at GMT0300, the pair is trading at 1252.5, with the gold trading 0.26% lower against the Dollar from Friday’s close. The pair is expected to find support at 1247.3667, and a fall through could take it to the next support level of 1242.2333. The pair is expected to find its first resistance at 1257.3667, and a rise through could take it to the next resistance level of 1262.2333. Gold is expected to find support at [1232.60-28076] and a fall through could take it to the next support level of [1212.50-27518] Gold is expected to find its first resistance at [1268.90-29098] and a rise through could take it to the next resistance level of [1185.10-29562] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 GOLD COMMEX USD/OZ 1212.50 1232.60 1268.90 1185.10 GOLD MCX RS/10 GM 27518 28076 29098 29562 www.capitalaim.com

4. support@capitalaim.com SILVER For the 24 hours to 23:00 GMT, the Silver rose 1.42% against the USD and closed at USD16.84 per ounce on Friday, tracking gains in gold prices. In the Asian session, at GMT0300, the pair is trading at 16.85, with the Silver trading 0.06% higher against the USD from Friday’s close. The pair is expected to find support at 16.6417, and a fall through could take it to the next support level of 16.4333. The pair is expected to find its first resistance at 17.0167, and a rise through could take it to the next resistance level of 17.1833. Silver is expected to find support at [16.50-38436] and a fall through could take it to the next support level of [16.10-37761] Silver is expected to find its first resistance at [17.20-39580] and a rise through could take it to the next resistance level of [17.50-40049] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 SILVER COMMEX USD/OZ 16.10 16.50 17.20 17.50 SILVER MCX RS/KG 37761 38436 39580 40049 www.capitalaim.com

5. support@capitalaim.com ENERGIES CRUDE OIL For the 24 hours to 23:00 GMT, the Crude Oil rose 2.03% against the USD and closed at USD50.37 on Friday, on rising hopes that OPEC and other oil producing nations would agree to extend output cuts in a meeting scheduled this week. Meanwhile, Baker Hughes reported that US drillers added eight oil rigs in the week ended 19 May, bringing the total count to 720. In the Asian session, at GMT0300, the pair is trading at 50.82, with the Crude Oil trading 0.89% higher from Friday’s close. The pair is expected to find support at 49.93, and a fall through could take it to the next support level of 49.04. The pair is expected to find its first resistance at 51.3, and a rise through could take it to the next resistance level of 51.78. Crude oil is expected to find support at [49.00-3140] and a fall through could take it to the next support level of [46.90-3010] Crude oil is expected to find its first resistance at [52.30-3340] and a rise through could take it to the next resistance level of [53.30-3410] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 CRUDE OIL COMMEX USD/BBL 46.90 49.00 52.30 53.30 CRUDE OIL MCX INR/BBL 3010 3140 3340 3410 www.capitalaim.com

6. support@capitalaim.com NATURAL GAS Natural gas futures for June delivery rose 7.4 cents to settle at $3.256 per million British thermal units, up 2.3% for the session but about 4.9% lower for the week. Natural gas is expected to find support at [3.20-202.90] and a fall through could take it to the next support level of [3.00-195.30] Natural gas is expected to find its first resistance at [3.40-218.50] and a rise through could take it to the next resistance level of [3.60-226.30] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 NATURAL GAS COMMEX USD/MMBTU 3.00 3.20 3.40 3.60 NATURAL GAS MCX INR/MMBTU 195.30 202.90 218.50 226.30 www.capitalaim.com

7. support@capitalaim.com BASE METALS COPPER Copper prices climbed to the highest level in more than two weeks Friday, as a threatened labor strike at a mine in Indonesia looked set to disrupt supplies. Copper climbed 2.19% to $2.58 a pound Copper is expected to find support at [2.50-360.80] and a fall through could take it to the next support level of [2.40-352.10] Copper is expected to find its first resistance at [2.60-374.20] and a rise through could take it to the next resistance level of [2.70-378.90] TECHNICAL LEVELS COMMODITY EXCHANGE QUOTE S2 S1 R1 R2 COPPER COMMEX Cents/Lb 2.40 2.50 2.60 2.70 COPPER MCX INR/Kg 352.10 360.80 374.20 378.90 www.capitalaim.com

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11. support@capitalaim.com Disclaimer The recommendations made herein do not constitute an offer to sell or a solicitation to buy any securities mentioned. Readers using the information contained herein are solely responsible for their actions. The information and views contained herein are believed to be reliable but no responsibility or liability is accepted for errors of facts and opinions. Editors may or may not have trading or investment positions in the securities mentioned herein. Report by, Research Analyst Desh Deepak _____________________________________________________________________ www.capitalaim.com