Daily Report 251114 2014-11-26
Gold
 
Main contract of domestic gold AU 1506 remained narrowly range-bound in the night session. The gold is expected to continue rallying after standing on 5-day moving average for short term. As for operations, previous long positions opened against 5-day moving average could be held. Stop-profit could be set at RMB 240 for part of positions. Performance of gold around RMB 237 should be in focus. Overnight gold market is relatively calm while the gold in international market fluctuates and corrects. The overnight gold ETF remains flat for the past 5 days. Attention should be paid to the revised quarterly U.S. GDP, housing price index in September and consumer confidence index. If economic data continue rallying, the rebound of gold will be influenced. The U.S. stock market will close on Thursday due to the Thanksgiving Day. On Sunday, the Swiss central bank will have a referendum to determine whether to increase gold reserve or not. Risk control method should be prepared for long positions. Holding positions in long run are not recommended.


Silver
 
Main contract of domestic silver AG 1506 kept narrowly range-bound as well. However, the silver is still above 5-day moving average in short term, indicating the rallying trend remains. As for operations, previous long positions opened when the gold broke through 5-day moving average at RMB 3350 could be held. Part of positions could be closed at RMB 3500 to make a profit. Bolster effect at RMB 3430 should be in focus during the intraday trading. On the whole, the silver is still following the trend of gold. It wound be hardly likely for the silver to get out the trend independently. Positions of overnight silver ETF remained flat for the past 5 days. 


Copper
 
On Monday LME copper price opened in a high price but followed with downward trend; closed down by $44. From the fundamentals, LME spot price edged up $1 to $61; the inventory level increased 1025 tons to 162000. The domestic spot premium lowered RMB 20 to RMB 60-140; market trading and investing are weak; it is clear that the supply is much greater than demand. Technically, LME copper price is still waving around $6530 to $6830.


Soybean

Overnight the U.S. soybean and soybean meal closed with low prices; it caused by the harvest time is almost end and the abundant supply. For now the U.S. soybean price is waving around $10-11; current focus should be on the huge amount of supply and the demand of the market; judging from historical data, by the end of Q4 to 2015 Jan., the market volatility would be in the trend of waving up. Though this year there is a heavy pressure from the supply, the market has already consumed previous bearish thoughts due to the increasing of supply. In the future, any bullish news would support the market somehow.
For DCE soybean No.1 contract, it appears weak in general. The spot price near the manufacturing location remains low; we expected that the price of further month contract is heavily under pressure. DCE soybean meal callback pattern continues; the spot price in south China and east China has already lower than RMB 3300 per ton; the pre-sale price of spot price in early next month is lower than RMB 3200 per ton. We suggest that for DCE soybean meal occasionally short; for short position of soybean No. 1 contract occasionally stop-profit.


PP

Yesterday contract 1501 opened high but followed with downward trend. It opened at RMB 9716 and closed at RMB 9716. The trading volume is 229000 and the holdings are 137000 lots. Contract 1505 opened at RMB 8945 and closed at RMB 8837. The trading volume is 138000 and the holdings are 152000. From the upstream perspective, propylene price flat as yesterday.
For devices, the device centralized maintenance is still in progress; last week the rate of operation rebounded slightly, but it is far below the figure from last month. The centralized maintenance did not impact the market that much since the inventory level is high, which could not effectively support the market.
For instance of the wire drawing price, today's mainstream of North China bid in RMB 10150-10350 per ton, East China mainstream quotation around RMB 10200-10400 per ton, South China mainstream quotation in RMB 10400-10550 per ton. Currently, contract 1501 is strongly supported by RMB 9600-9650; which leads to contract 1505 almost approach its low and MACD appears deviation form. 
                                                                                          Dong LV (Investment Certificate NO. TZ008452)