Commodity Trade Mantra

Gold Futures at $1600 on Spain Rescue, Range bound for the week.

Gold Futures tips

Gold Futures at $1600 on Spain Rescue, Range bound for the week.

Gold Futures along with Silver, Crude Oil & Copper may remain volatile & generally range bound for the week. A few stray spikes & movements within the range may be seen on key Economic data announcements. Overall, the financial world will await the outcome of the Greece elections to be held this weekend. Thursday’s Chinese interest-rate cut may not be enough for a sustainable commodity rally.

Recent performance of Gold has not matched investor expectations due to a stronger dollar and US Fed Reserve giving no indications of further monetary easing. After the net redemptions suffered in May, ETP holdings have stabilized and recorded modest net inflows thus far in June. Holdings are up 7 tonnes.

For the week, Gold Futures for August delivery till above $1582.30 will rise further to $1606, $1621 & then to $1648. A decline below $1578.70 could trigger weekly declines to $1567, $1540 & on further temporary volatility to $1526.50 also.

Early next week could set the tone for further direction in Gold Futures. Only a break in Gold Aug Futures with sustained momentum above $1652.50 will trigger Bullishness & then rises to $1686.25, $1747 & $1783 may also be seen. The level of $1652.50 is now crucial in Gold for further yearly Bullishness.

I have Repeatedly Alerted of Gold Futures having very strong support at $1540 levels & major weakness in Gold Futures will ONLY commence on a sustained decline Below $1540 on a Closing Basis, which in turn may send Gold Futures sharply down to $1270 levels also. Only a close below $1540 will indicate a strong bearishness for Gold Futures. But further declines in Gold below $1540 on a closing basis may be very limited.

For the week, Silver July Futures above $28.09 will rise to $28.72, $29.08, $29.53 & on a break above $29.80 to $31.60 . A decline below $28 could trigger weekly declines to $27.55, $27.10, $26.74 & to a very strong support of $26.20 also.

Sustained momentum in Silver above $32.05 will trigger Bullishness & then rises to $33.85, $36.10 & $37.54 may also be seen.  The level of $34.30 is now crucial in Silver for further yearly Bullishness.

Silver is currently seen oversold on the weekly chart. Silver holdings in the iShares Silver Trust, the biggest exchange-traded fund backed by Silver, dropped 30.17 metric tons on 8 June 2012 to 9,669.08 tons.

Although Bernanke didn’t offer hints in the near-term, he said that “the central bank was ready to shield the economy if financial troubles mounted,” which suggests that the knee-jerk speculative sellers will be buying back sooner rather than later. After hopes being dashed last week, regarding further QE by the Fed Reserve, the attention will now turn on the FOMC meeting, scheduled for June 19 and 20 for clues as to the likelihood of a fresh round of monetary easing, which could potentially hurt the U.S. dollar and support gold vice versa. Important Read: Is Bailout the Right way out?

According to news reports Indian physical gold demand has weakened on end of marriage season & start of the monsoon season. Higher Gold prices have curtailed demand & are prompting more scrap sales in India. India’s demand has lowered but sizeable demand growth has been seen in Thailand, Vietnam, Malaysia, Indonesia & Middle East China. Hong Kong shipped 101,768 kg of gold to mainland China in April, up 62% on month. Iran imported a massive $1.2 billion worth of precious metals fromTurkey in April alone. Turkish exports of gold, precious metals, pearls and coins to Iran rose to $1.2 billion in April from a tiny $7,500 a year earlier.

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