Daily Report 261114 2014-11-26
Gold

Domestic gold dropped first and then rallied in the night session. However, the gold is still standing above 5-day moving average at RMB 237, indicating the rebounding trend remains. In terms of operations, previous long positions opened against 5-day moving average at RMB 230 could be held. Stop-profit should be set around RMB 240. Performance of gold at RMB 237 should be in focus. On the whole, influenced by the upcoming Swiss Central Bank’s referendum towards gold reserve, the gold is expected to rally before the result is released on Sunday. Besides, the rallying trend of gold is dragged down by continuous improving U.S. economy. The revised U.S. GDP in Q3 is 3.9%, far higher than the expected figure 3.3%. The overnight gold ETF remains flat for the past six days, indicating the funds are waiting for next opportunity around $ 1200.


Silver

Domestic silver followed the trend of gold in the night session. However, the silver is still above 5-day moving average at RMB 3440 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 3440 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 dropped 41.73 tons after remaining flat for the past 5 days. The funds are closing positions when the price is high, indicating a bearish attitude towards silver in short term.


Aluminum

On Tuesday, LME 3-month aluminum edged up; closed at $2049.75 per ton, up 0.18%.


Soybean

Overnight the U.S soybean closed up, which impacted by technical buying and the boost of soybean meal. 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 pp futures opened in a low price and waved since. It opened at RMB 8783 and closed at RMB 8872. The trading volume increased 134000 lots to 272000 lots; the holdings increased 10242 lots to 162000 lots. From the upstream, overnight propylene dropped $10; average price is $1035.5 per ton. In terms of device, currently rate of operation is higher than last week, but lower than last month. From the spot perspective, yesterday domestic pp market appears in weak and down term trend; the price decreased RMB 50-100 per ton.
Petrochemical in east China, south China and CPC in east China, south China have partially lowered their ex-factory price; it has less support to the cost of goods supply. Merchants followed the downward trend to sell; generally they think further market will be bearish. For instance of the wire drawing price, today's mainstream of North China bid in RMB 10150-10250 per ton, East China mainstream quotation around RMB 10300-10450 per ton, South China mainstream quotation in RMB 10400-10550 per ton.
                                                                               Dong LV (Investment Certificate NO. TZ008452)