Daily Report 061114 2014-11-06
Gold

Domestic gold opened lower and then rose in the night session. After slumping below the bolster of RMB 230 yesterday, the gold continues dropping to as low as RMB 223.3. In terms of operations, the weak trend of gold remains. Part of previous short positions opened at RMB 242.5 could be held. Defensive moves should be prepared according to 5-days moving average at RMB 228.5. Performance of gold at RMB 224 should be in focus. The U.S. private sector employment data in October is better than expected and revised upwardly. It is expected that the non-farm payrolls being released on Friday will increasing as well. Risk of slump of gold should be cautiously prepared. Besides, the U.S. stocks rose slightly due to the U.S. mid-term election. The USD index grows strongly as well. Gold in foreign market plunged to as low as $ 1138. On the whole, changes of U.S. policy and performance of U.S. economy should be in focus. Positions of overnight gold ETF kept dropping by 3 ton to a 6-year low. Recently, both panic selling of gold by funds and weak demand of the China’s market on gold spot lead to the weak trend of gold afterwards.


Silver

Domestic silver showed a gap down opening and then rallied slightly in the night session. The trend of silver is not as strong as that of gold. The silver drops to as low as RMB 3264. In terms of operations, the weak trend of silver is believed to remain. Previous short positions opened at RMB 3780 are recommended to hold. Defensive moves should be prepared according to 5-day moving average at RMB 3430. Performance of silver around RMB 3320 should be in focus during the intraday trading. The silver in the foreign market basically follows the trend of gold, but the decline of sliver is higher than that of gold. After dropping below the bolster at $ 16 in the short term, the silver is expected to remain weak trend. Performance of silver around $ 15 should be focused. Positions of overnight silver ETF shrank by 64.49 tons, which indicates the funds turned to be bearish toward the silver in short term.


Stock Index

Stock index kept fluctuating and correcting yesterday. Weak balance of China’s economy remains. Both the easing space and the effect of real estate policy shrink. However, the monetary environment is relatively loose. The Shanghai – Hong Kong Stock Connect is increasingly expected by the investors. Besides, ‘China version of the Marshall plan’ will be the new hot spot today. It is believed the plan will promote sectors related to construction of infrastructure. After the previous upward trend, rang-bound of stock index is likely to take place. However, there is no sign that the strong trend of stock index will reverse.


Copper

On Wednesday, the LME copper dropped as much as hundreds of USD. However, it rallied afterwards and offset most of the loss. The LME copper closed at $ 6628, slipping $ 20. Domestic copper spot premium increased RMB 20 to RMB 40 – RMB 110. New downstream long positions advanced due to the decline of copper. The supply is decreasing while the market trading volume is improving. Normally, the orders soar at the end of year in both air conditioner industry and cable industry. Therefore, the copper will be bolstered at this time of year. However, it is believed the copper is likely to remain fluctuating and slipping. As for technical analysis, the copper is bolstered near the bottom line in recent fluctuation region from $ 6530 to $ 6830. It is expected the copper may rally in short term. After the upcoming rebound, investors are recommended to close those short-term long positions.


Aluminum

The LME 3-month copper dropped first and then rallied on Wednesday, dropping 0.05% and closing at $ 2059 / ton. In domestic market, performance of Shanghai Aluminum around RMB 13800 / ton should be in focus after the previous decrease.


Soybean

In domestic market, contracts related to soybean in Dalian Commodity Exchange slips for the third day due to the decrease of oil and spot goods. The No.1 soybean performs independently, fluctuating weakly during intraday trading. Domestic soybean spot is relatively weak. Investors are holding bearish sentiment toward the market due to the upcoming selling of soybean. Soybean meal in part of the region dropped from RMB 10 / ton to RMB 20 / ton. Influenced by the decrease of U.S. soybean and the imported soybean in November, soybean meal spot in many regions dropped. Besides, the bird flu caused market panic yesterday, which further dragged down the soybean. In terms of operations, short-term short positions for soybean meal in Dalian Commodity Exchange are recommended. As for the No.1 soybean, contracts in near months are believed to be strong while contracts in far months are weak.
                                                                                           Dong LV (Investment Certificate NO. TZ008452)