Daily Report 171114 2014-11-17
Gold

In domestic market, main contracts of AU 1501 rose as much as 2.52% last Friday, soaring after breaking through the 5-day moving average at RMB 230. In the short term, the gold is under pressure from 20-day moving average at RMB 236. The gold has revised part of its previous decrease in recent two weeks. The gold is likely to rebound in short term, but the weak trend in middle term remains. In terms of operations, defensive moves should be prepared according to 5-day moving average for previous short positions. Performance of gold at RMB 236 should be in focus. On the whole, the Euro and JPY continue depreciating due to the easing policy adopted by the European Central Bank and Bank of Japan. Besides, economy of the U.S. keeps rallying and the upward momentum of the USD is pretty strong. However, attitudes toward the rate hike in the Fed are mixed. Statement of the hawkish that the rate hike will take place next year slightly has the edge. The U.S. CPI in October and the Fed Meeting Minutes will be released this week, which will give the market more information. It is believed that the gold will remain weak in middle term before the rate hike. However, the gold is likely to rebound as well. The overnight gold ETF has dropped 20.58 tons to 720.62 tons from the beginning of the month to November 16, which indicates the funds are hold bearish attitude toward the gold.


Silver

Last Friday domestic silver future price of contact 1506 rallied along with the gold price. The price up 4.1%, after it broke through RMB 3350 it is going test the performance of RMB 3500. In terms of operation, silver price waves quite dramatic. Previous short orders should make defense at RMB 3320 on 5-day moving average, in the short term pay attention to potential risk of short. In general, silver price followed with gold, it may hardly get rid of the independent situation. From the beginning of Nov. till 16th silver ETF holdings were increased 78.59 ton, which supports the silver price.


Soybean

Trends of contracts related to soybean in Dalian Commodity Exchange are independent. Influenced by the weak domestic soybean spot, the soybean market further shrank. Soybean meal spot is relatively strong. However, the U.S. soybean will arrive at the harbor at the end of this month, which brings pressure to soybean afterwards. The amount of imported soybean is expected to be as much as 12.5 million tons. In terms of operations, considering the soybean fluctuates strongly in foreign market, short-term moves could be taken for soybean meal in Dalian Commodity Exchange. As for the No.1 soybean, the trend is relatively weak. Therefore, short positions are recommended for this term.


PP

Last Friday pp futures opened in a low price and followed with waving. It opened at RMB 9780 and closed at RMB 9742. The trading volume is 10258 lots to 378000 lots. The holdings increased to 7706 lots to 173000 lots. From the upstream, on Friday the FOB Korea Propylene fell $10 and the average price is $1140.5. In terms of spots, last Friday among most pp markets pp price remained waving with a slight fallback; the range is around RMB 50-100 per ton.
Most petrochemical area has lowered their ex-factory price. This has less support to the market cost, which also suggests most factories are under pressure of their inventory. The price of pp futures continues waving around low positions, which must hammer the market somehow. Most merchants are active in shipment, but less willing to set up new orders; the main strategy is to remain operating with low inventory.
For instance of the wire drawing price, today's mainstream of North China bid in RMB 10250-10500 per ton, East China mainstream quotation in RMB 10450-10650 per ton, South China mainstream quotation in RMB 10550-10650 per ton. In general, current price is below previous downward trend; but since the main contract 1501 is nearby delivery month, the basis is wide; it suggests the price is hardly rising up or falling further. We suggest paying attention of the performance at RMB 9600; in the short term the volatility is more likely to be narrowed.
                                                                                    Dong LV (Investment Certificate NO. TZ008452)