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GOLD

Gold was positive over the week ending July 14th. The market was supported from weakening dollar index, in addition to the fall in the US treasury yields. The easing interest rate concerns added to the positive tone. These factors are likely to favor the upward trend this week as well. Focus on the dollar index shall continue, since the market will look forward to possibility regarding any pull back action, against the recent fall.

Technical Outlook :

The ability of bouncing sharply from the 50-week exponential moving average indicates convincing buying interest in the derivatives. The July contract can attain the 60000 level, as long as closes above the 58600- 58650 support region.

SILVER

Silver was positive for the entire week and showed a better strength than gold. Strong upside rally in the base metals and falling dollar value, supported the futures market. Considering a similar fundamental scenario we remain bullish for this week as well.

Technical Outlook :

The commodity continued making higher tops and bottoms for most of the week and ended with a massive gain of 3 percent. The positional buyers should maintain their positions and look forward to add after moderate corrections, as long the September contract closes above the 73200 mark. Under this scenario we expect the gains to continue towards the 78000/78500 level.

Crude oil

Crude oil closed above the 6000 level for a second consecutive week, although the prices had cooled off a bit after the recent run up on Friday. Overall the market remains positive on the back of disrupted global supplies, improving demand prospects from the US and weakness in the dollar. We expect the upward trend to continue on the back of the underlying fundamentals

Technical Outlook :

The energy counter extended previous week’s gains and when compared with the May closing price, the July contract has gained 6.7 percent approximately. Further gains are expected towards the 6450/6500 region, unless the July contract fails to hold above the 6000 level. Maintain buy in crude oil positionally.

Natural gas

The commodity could not hold on to higher levels following reports of slightly milder weather for the later part of July, in addition to reduced estimate for short term exports possibility, contrary to the previous expectations. But this does not change the broader term business climate since the chances of European purchases are increasing for the US natural gas.

Technical Outlook :

The July derivative showed hesitation over trading above the 225 level and finished the week with a decline of 1.59 percent. Nevertheless the broader view still remains bullish and we expect prices to retest the 225/230 region, as long closes above the 198 support. We recommend buying the 200 Call option for this week.

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