Commodities saw inflows of $39.9 billion in the first half of 2009, with $15.1 billion in precious metals, $14 billion in energy, $7.8 billion in agriculture and $3 billion in base metals.
U.S. Consumer Prices rose 0.7 percent in June and Producer Prices climbed 1.8 percent, spurred by higher energy costs, government reports released last week showed.
MARKET RECAP
The bullion pack rallied sharply during last week on the back of a fall in the US Dollar and likewise a rally in the Euro. Further, the jump in the US June PPI & CPI appears to be a wakeup call that the inflationary threat of the Federal Reserve’s easy-money policy is real and rapidly approaching, in turn supportive for the bullion pack as it is considered a hedge against inflation. Both the CPI & PPI data rose more than expected, further supporting the bulls to build long positions in the bullion pack. Global demand on the investment side is showing signs of a slight pickup but fabrication/jewellery demand continues to remain tepid.
the currency market, the Euro rallied against the USD last week, to end the week above 1.4000 with the Euro continuing to close above its 100-Day as well as 200-day Moving Average indicating its overall strength. It is also closing above its 10-Week as well as 30-week EMA respectively. The 14-Day RSI is at 58 levels whereas 14-Week RSI is at 60 levels. For the day, support is seen at 1.4100/1.4055 whereas resistance is seen at 1.4188/1.4210. The Rupee traded sideways against the USD last week, touching a low of 49.445 but later in the week, it strengthened to end the week at 48.73. On the upside, the Rupee is still to close above 1ts 100-day Moving Average on a consistent basis for any further weakening of the Rupee to continue. 14-Day RSI is at 51 levels whereas 14-Week RSI is at 50. For the day, support is seen at 48.30/48.00 whereas resistance is seen at 48.75/48.90.
OUTLOOK
The Bullion pack, both Gold & Silver continue to trade above their 10-Day Moving Average indicating that the short-term trend has changed to up. For Spot Gold, consistent trading above the $942 mark shall take prices towards the major resistance zone of $948 - $952, with Spot Gold closing above its 30-Day Moving Average as well. Weakness in the Dollar Index (DX) along with inflationary concerns continues to be the key supportive factors for the bullion pack. Physical demand, both ETF as well as jewellery continue to play a significant role in determining prices. The US Dollar direction along with cues from Global financial markets shall influence the bullion pack as rising global financial markets could mean investors raising their risk appetite.
On intraday basis, Spot Gold prices have immediate support at $932/$928 whereas resistance is seen at $945/$953. Spot Silver prices shall find support at $13.35/$13.10 whereas resistance is seen at $13.465/$13.80.
MCX August Gold has support at 14770/14680 whereas resistance is seen at 14865/14925. MCX Sep Silver shall find support at 21970/21785 whereas resistance is seen at 22405/22633 levels.
