Daily Report 050515 2015-05-05
Main contract of domestic gold AU 1506 rallied slightly in the night session, covering the downward gap on Monday. The moving averages stick together at RMB 240.5 in short term. Strong pressure was found against the rebound. The gold is believed to continue this downward trend and broadly correct in the region from RMB 244 to RMB 235 in short term. Sound investors should focus on the operational opportunities after this region is broken through. On the whole, the Fed meeting minutes last week is relatively hawkish. The increase of US industrial orders in March hit its record high in the past 8 months. The US dollar index met bolster around ﹩94 and then kept rebounding for two days. However, the Fed officers’ attitude toward the rate hike is still mixed. Sound investors should wait for opportunities after the US non-farm payrolls are released on Friday. The gold ETF positions have been flat after rising 2.39 tons on Friday, indicating the funds are holding an optimistic view of the gold when the price is under ﹩1,200.
Main contract of domestic silver AG 1506 showed a gap up opening and then fell down. The bolster effect of 60-day moving average at RMB 3565 is tested. On the whole, the silver is still following the trend of gold and is likely to remain a downward trend afterwards. Recently, the silver is expected to broadly correct in the region between RMB 3400 and RMB 3700. Sound investors are recommended to focus on the opportunity after this region is broken through.
On Monday LME market was closed due to bank holiday, domestic copper price opened up high with narrow fluctuating. In macro aspect, HSBC China manufacturing industry PMI in April has a new low of a year which is 48.9. This suggests that current producing level of domestic middle to small enterprise does not looking good. However since the central economic working conference states this figure will gradually increasing; recently it is more likely that monetary policy and fiscal policy will increase which somehow support the market.
In terms of fundamentals, on Monday domestic copper price increased sharply; spots premium slightly increased RMB 10 to 50-120 premium. Though the market investing and trading are thin, spots support the market to go along bullish. Technically, LME copper price is likely to challenge $6500-$6600, support line at $6300. Domestic copper price still may rally to RMB 47000, support line at RMB 45000. We suggest holding long positions.
Overnight U.S. soybean price closed up, which impacted by the rumors that the demand of China soybean oil is increasing. In domestic market, the expected sowing area of soybean is reduced even further in this year and also the next year; domestic soybean supply in next year is clearly reduced, which is going to inspire the price in middle-long term rally. Hence we suggest holding back month soybean contract no.1 long positions. Soybean meal middle term investing on short positions continually hold.
Yesterday PP futures price continues waving; it opened at RMB 8943 and closed at RMB 8910; the trading volume increased 86122 lots to 666,000 lots; the holdings increased 8548 lots to 486,000 lots. About upper stream, FOB Korean propylene price remains stable, average price $1000.5 per ton. In spots market, yesterday market common use martial price of domestic PP continually going up.
For instance of the wire drawing price, today's mainstream of North China bid in RMB 9600-9700 per ton, East China mainstream quotation in RMB 9700-9800 per ton, South China mainstream quotation in RMB9700-9900 per ton.

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