11 May 2015

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WEEKLY COMMODITY REPORT

Gold
Gold edged higher on Friday, snapping two days of losses, as revisions to U.S. payrolls data supported speculation that the Federal Reserve may hold off raising interest rates in the immediate future. U.S. job growth rebounded last month and the unemployment rate dropped to a near seven-year low of 5.4 percent, potentially keeping the Federal Reserve on track to hike interest rates this year. However, March payrolls were revised to show only 85,000 jobs created, the smallest number since June 2012. Mixed economic data has pushed earlier expectations for the Federal Reserve to announce a rate rise at its June policy meeting back to later this year.

Outlook
We expect gold prices are likely to trade negative on the back of US interest rate outlook.


Technical Outlook
Gold Strategy S2 S1 Close R1 R2
Jun Sell @ R1 26650 26750 26889 27000 27100



Silver
Silver was up 0.7 percent at $16.43 an ounce. U.S. job growth rebounded last month and the unemployment rate dropped to a near seven-year low of 5.4 percent, signs of a pick-up in economic momentum that could keep the Federal Reserve on track to hike interest rates this year. Nonfarm payrolls increased 223,000 as gains in services sector jobs offset weakness in mining, the Labor Department said on Friday. The one-tenth of a percentage point decline in the unemployment rate to its lowest level since May 2008 came even as more people piled into the labor market.

Outlook
We expect silver prices are likely to trade negative on the back of US interest rate outlook.

Technical Outlook
Silver Strategy S2 S1 Close R1 R2
Jul Sell @ R1 37300 37600 37935 38000 38300

Crude Oil
Brent oil posted its first weekly loss in a month on Friday as the market fretted again about global oversupply while U.S. crude rose for an eighth straight week, helped by jobs growth data and the first storm of the hurricane season forming. Crude prices had rallied with little pause over the past month, helped by a weaker dollar and bets that better demand in the near term will ease the supply glut. But on Thursday, prices fell as much as 3 percent, their most since early April, after hitting 2015 highs. Oil was also pressured by a stronger dollar and physical oil markets showing tens millions of West African, Azeri and North Sea crude barrels without buyers. Brent slipped after early support from record high crude imports in China in April. Traders cautioned that low prices could encourage China to stockpile, adding to global inventories. Trading also turned choppy on the realization that last week's drawdown in U.S. inventories was at the expense of builds in gasoline and distillates. Also supportive to the market was news that Ana, the first named storm of the Atlantic hurricane season which traditionally begins June 1, had formed off the coast of South Carolina. U.S. crude also stayed resilient despite this week's drop in the country's oil rig count, a measure for future output, being the smallest in a month.

Outlook
We expect crude oil prices to trade negative on the back of profit booking after sharp rise in prices.

Technical Outlook
Crude Oil Strategy S2 S1 Close R1 R2
May Sell @ R1 3720 3750 3796 3810 3840


Natural Gas
U.S. natural gas futures surged over 5 percent on Friday after the frontmonth crossed above the 100-day moving average for the first time since December as forecasts for production eased a bit. The Global Forecast System weather model for the lower 48 continued to call for warmer-than-normal temperatures over the next two weeks, according to Thomson Reuters Analytics. Thomson Reuters Analytics forecast consumption in the lower 48 over the next two weeks would edge up to 54.8 bcfd from 54.6 bcfd on Thursday. That compares with a 30-year norm of 50.6 bcfd for this time of year. Despite consumption being over the 30-year norm, traders noted demand was still near its lowest in six months because there was little heating or cooling needed in the middle of the spring.

Outlook
We expect Natural gas prices to trade positive on the back of warmer weather forecast for next few days

Technical Outlook
Nat Gas Strategy S2 S1 Close R1 R2
May Sell @ R1 178 181 183.3 185 189

Base Metals
Copper was softer on Friday, but signs of robust demand from top consumer China helped support prices, while the tin market focussed on expectations of tighter supplies due to Indonesian export cuts. China's copper imports fell 4.4 percent year-on-year in April. But arrivals of anode, refined copper, copper alloys and semi-finished copper products stood at 430,000 tonnes in April, the highest monthly imports since April 2014 and up 4.9 percent from 410,000 tonnes in March. Clues to Chinese demand for industrial metals will come next week with data on industrial production and investment.

Outlook
We expect base metal prices to trade negative on the back of profit booking after sharp rise in prices last week.

Technical Outlook
May/*Jun Strategy S2 S1 Close R1 R2
Copper* Sell @ R1 409 411 414.2 415 417
Nickel Sell @ R1 900 908 913.6 922 930
Alum Sell @ R1 118 118.8 119.5 120 120.7
Lead Sell @ R1 129 130 130.5 131.8 132.9
Zinc Sideways 149 150 150.7 151 152





LME Inventories
Copper Lead Zinc Aluminium Nickel
Current Stock 339075 163150 454725 3844975 441174
Change -650 -1375 -2500 -7725 -1260 %
Change -0.19% -0.84% -0.55% -0.20% -0.28%

DATA COURTESY:SGCSPL