Daily Report 030914 2014-09-10
Gold  
The domestic gold showed a gap down opening in the night market, dropping below the triangle convergence region in the short term. Boosted by the plunge of crude oil index, the U.S. dollar index rallied. Gold denominated by dollars dropped significantly as well. Besides, the U.S. ISM manufacturing index rebounded strongly in August, which is regarded as another positive influencing factor for the increase of the U.S. dollars. On the contrary, the Euro is under pressure resulting from the continuous decrease of the Euro Zone PPI data. The gap between the U.S’s and the Europe’s economy is widening. During the intraday trading, attention should be paid to China’s official and HSBC PMI and the U.S. industrial orders in July. The gold ETF overnight positions dropped by 1.8 tons, indicating the funds are not holding optimistic views towards the gold market. The constancy of positions decreasing should be focused on.
In terms of operations, the market was weak during the intraday trading yesterday and short positions opened at RMB 256 are recommended to be held. The stop-profit point should be set at 249.5. As for the trend, it is believed that the gold may continue decreasing after dropping below the triangle convergence region.
 
Silver
Following the trend of gold, the domestic silver shows a gap down opening in the night market. However, it seems the silver is slightly lack of downward momentum. Compared with silver spot, the silver futures kept decreasing, which bolstered the silver price. But it is difficult for the silver to rise independently while the gold is rather weak. In terms of operations, short positions opened at RMB 4130 are recommended to be held. The stop-profit point should be set at RMB 4080. As for the trend, the silver is considered to drop marginally and may rebound in the short term.
 
Copper
On Tuesday LME copper bounce back, closed up $7.5. Overnight U.S. economic data looks pretty, but strong dollar still cased a certain pressure to prices. In August, the manufacturing PMI rose up to 59, which is far greater than previous expected figure 56.9. And also the former value is 57.1, which is a new high since March 2011. It means the U.S. manufacturing activity is accelerated growing, according to data released on Tuesday by the institute for supply management (ISM).
Moreover, the U.S. construction spending rose up 1.8% in July, which is the highest level since December 2008. The ICE dollar index climbed to the highest level during the year on Tuesday. It was formed certain pressure to the copper. Pay attention to the European central bank (ECB) meeting on Thursday night.
 
Fundamentally, LME spot premiums fell slightly to $24, inventory slightly declined 200 tons but the total volume remains 148000 tons. The premium of domestic spot decreased RMB 10 to RMB 130- RMB230. The upstream ship stable, and the supply is ample. The middlemen buy goods at lower price, and the downstream buy goods according to demand. Both of market demand and supply are thin. Information from the supply side stated due to the delay of installation of the grinding equipment, Chinalco lowered the Toromocho copper mine output level of this year. It has been cut down from previous 10-12 tons to 8-8.5 tons now. This mine is expected to reach full capacity in the fourth quarter.
Technically, price rebound might still have a certain resistance. LME copper might hit its resistance around $7000 on 10-days moving average. We are waiting for the signs of rebound ending.

Dong LV (Investment Certificate NO. TZ008452)