Daily Report 220914 2014-09-22
Macro economy
After rising for 3 straight days last week, the U.S. stocks barely changed on Friday. Some of the stocks increased while others dropped. Specifically, previous Alibaba increased strongly on its first day listed on the U.S stocks market, but this was offset by the decline of technology stocks, such as Oracle and Yahoo. However, the Dow 
Jones index advanced slightly higher and hit its record high for two straight days. 
Group of Twenty Finance Ministers and Central Bank Governors believe that if majordecision makers still rely onmonetary stimulus to promote the economy, the possibility of financial market risk may be raised. German central bank president Weidmann claims the space that governments adopt fiscal policy to stimulate economy 
may be more limited than expected. The ECB considers additional stimulus policy is temporarily not necessary after the stimulus measures have dragged down the Euro in the past three months. Results of previous measures should be evaluated according to the following trend of economy. This statement led to policy disagreementinside the EU. The risk of decline of Europe’ economy still exists. 
Domestically, news released last week that the People’s Bank of China would provideRMB 500 billion StandingLending Facility (SLF) to five major banks has been proved. China Construction Bank (CCB) Chairman Wang Hongzhang claims that the CCB is discussing the SLF with the People’s Bank of China. Finance Minister Lou Jiwei declared on the meeting of Group of Twenty Finance Ministers and Central Bank Governors that China’s economy is growing steadily on the whole, within a reasonable range. The government will not make big adjustments based only on the change of one single economic index. The expectation of easing policy may be cooleddowndue to this statement. The government will continue boosting revolution to promote the economy.
 
 
 
Gold
Last Friday domestic gold price opened in a low point and slump further, moving average indicates for short trend. In term of operation, previously short positions bought in at RMB 249.5 high price could be held continually. Shorts for short term on 5-days moving average at RMB 245 should be defend, intraday focus on performance at RMB 242.5. During the trading, if the market is weak then try short in the short term, aim at RMB 240.
Less intense Ukraine issue and the failure of Scottish independence, after all those political instability cooling down, short term bullish factors are reduced. Moreover, recently strong trend of dollar index and American stock market are continually hammering the gold price; and capital outflow of gold market sharply, gold ETF has six straight days of dropping in holdings of 11.96 tons. At the same time, till last Tuesday silver non-commercial net positions were being dropped continually (on behalf of the speculative positions); mutually commercial net positions were continually bought in (on behalf of the manufacture hedging positions). It means recently no matter speculator or spot manufacturers, they think silver price will be bearish, updated by CFTC.
Current market is more likely to be bearish, be prepared for the risk of gold price hits a new low within this year. This week focus on U.S., Europe and China September PMI initial, the U.S. GDP terminal value in Q2 and announcement by many Fed officials.
 
 
 
Silver
Last Friday domestic silver price has a dramatic slump up to 3.4%, compared with gold price it has a further drop. In terms of operation, previously short position at RMB 4130 could be held continually. Also on last Friday during the session, whose short positions broke out RMB 4020 could be held. Intraday pay attention to the risk of short in short period, and defense at RMB 3900.
Although domestic spot has a straight premium compared with its future, both domestic futures and foreign market silver price are dropping continually. Domestic premium has a further expand, considering the particularity and speculative of silver over gold, silver may hardly get rid of independent situation. However, currently silver price is at low price of RMB 3800, if it continues to fall then still requires for fundamentals underpinning.
Judging from the funds, till last Tuesday silver non-commercial net positions were being dropped continually (on behalf of the speculative positions); mutually commercial net positions were continually bought in (on behalf of the manufacture hedging positions). It means recently no matter speculator or spot manufacturers, they think silver price will be bearish, updated by CFTC.
                                                                                                                   Dong LV (Investment Certificate NO. TZ008452)