Nifty Futures Could Top Around 7910 (1st August) And Fall To 7600 (6th August)
Every 18th Day Nifty Is Topping Out (BLUE LINES)
Since Election Day
Every 16th Day Nifty Is Bottoming (RED LINES)
Thursday, July 31, 2014
Nifty Futures Could Top Around 7910 And Fall To 7600
Nifty Futures Could Top Around 7910 (1st August) And Fall To 7600 (6th August)
Every 18th Day Nifty Is Topping Out (BLUE LINES)
Since Election Day
Every 16th Day Nifty Is Bottoming (RED LINES)
Robust copper price prompts switch to aluminum
In New York trade on Wednesday copper rallied after much stronger than anticipated US GDP figures, reaching a high of $3.2625.
Defying market expectations, the copper price dug itself out of a near four-year low struck mid-March of $2.92 a pound and has gained more than 7% since early June. The metal is now down only 4% in 2014.
The copper price is highly correlated with economic growth thanks to the widespread use of the metal in the construction, transport and power industries, and the robustness of the red metal is prompting industry to switch to much cheaper aluminum for some applications.
Primarily recovered from bauxite ore, aluminum was trading on par with copper in 2002, but while copper has quadrupled since then, the aluminum price has gone nowhere.
FT.com reports "demand for aluminium cable, especially in the power industry, is already rising at the expense of copper":
Even though aluminium cables require a thicker core of metal – and thus more insulation – the weak LME price means that the overall cost is still around 40 per cent lower than for copper cables, according to the French company Nexans, a leading cable producer.
It's a trend already established in China and Gulf states where only 25% of insulated and overhead cables use copper versus 60% in developed economies.
US growth, inflation numbers drop gold price through $1,300
The gold price fell below the psychologically important $1,300 an ounce level on Wednesday after strong economic data outweighed safe haven buying on geopolitical concerns.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery in early morning trade exchanged hands for $1,294.60 an ounce, down $5.60 from Tuesday's trading session.
US gross domestic product grew at a 4% annual pace in the second quarter, according to government data released Wednesday. First quarter number were also adjusted, showing a smaller contraction.
The much better than expected numbers – led by robust consumer spending and a pickup in construction and business investment – boosted the dollar which usually move in the opposite direction of the gold price.
The data also strengthens the case for an accelerated winding down of the US Federal Reserve's economic stimulus program and a sooner than anticipated rise in US interest rates.
Higher rates increases the opportunity costs of holding gold because the metal is not income producing.
Clouding the picture further was a 2% annualized rise in US inflation at its strongest rate in three years, which could also prompt a hike in rates.
Though off its highs for the year gold is still up some 9% in 2014.
The key US employment report on Friday will give further direction for US monetary policy and the gold price.
"Gold Could Go To Infinity" - Ron Paul
“I Still Believe In Gold” - Ron Paul
Dr Ron Paul, the popular Presidential candidate and America and the world's most popular libertarian voice, told CNBC yesterday that he “still believes in gold” and that “gold could go to infinity.”
Jackie DeAngelis:
“It's roughly I think up 8% year-to-date. It's not a horrible move for gold but I think a lot of people were expecting to see a little bit more, especially with the instability that we're seeing in terms of the geopolitical situation. A lot of conflict around the world -- you'd expect gold to be higher right now.”
Ron Paul:
“Yeah, but if you understand the subjective theory of value, you don't get too concerned about that because, yes, increasing the money supply weakens the dollar and a weaker dollar raises the price of gold and it's a long term measurement. But you can't measure, you can't say that the money supply went up a certain amount, and gold is going to go up, so there's a subjective element in that.”
“But long term...and economic law says, if you keep printing a lot of paper money, the value of that dollar and currency will go down, and things and most prices will go up and indeed gold always goes up against that currency.”
“But you don't, I don't get in the business of saying in a year or two or three it's going to be two or three or four thousand dollars because it really challenges the basic fundamental beliefs of the Austrian school, to make these kinds of predictions.”
The interview about gold can be watched here
Dr Ron Paul, the popular Presidential candidate and America and the world's most popular libertarian voice, told CNBC yesterday that he “still believes in gold” and that “gold could go to infinity.”
Former U.S. Representative Dr Ron Paul told CNBC's Jackie DeAngelis and the Futures Now Traders that the long-term case for gold remains firmly intact.
Dr Ron Paul:
“Timing is the only thing. I remember watching gold when it was 35 dollars an ounce and we thought if it ever hit a hundred dollars, the world would come to an end. And then a thousand dollars, so; no, it's good as long as we continues to do this <print money> , you know, it could go to infinity because when people just leave the dollar, who knows what …”
“But that won't happen if we finally wake up and do something. But if we can keep this together, if the money managers can keep it together and it doesn't collapse, yes, gold is gonna keep creeping up, but, you know, as weak as gold looks right now, it's up a hundred dollars for this year so…”
Dr Ron Paul:
“Timing is the only thing. I remember watching gold when it was 35 dollars an ounce and we thought if it ever hit a hundred dollars, the world would come to an end. And then a thousand dollars, so; no, it's good as long as we continues to do this <print money> , you know, it could go to infinity because when people just leave the dollar, who knows what …”
“But that won't happen if we finally wake up and do something. But if we can keep this together, if the money managers can keep it together and it doesn't collapse, yes, gold is gonna keep creeping up, but, you know, as weak as gold looks right now, it's up a hundred dollars for this year so…”
Jackie DeAngelis:
“It's roughly I think up 8% year-to-date. It's not a horrible move for gold but I think a lot of people were expecting to see a little bit more, especially with the instability that we're seeing in terms of the geopolitical situation. A lot of conflict around the world -- you'd expect gold to be higher right now.”
Ron Paul:
“Yeah, but if you understand the subjective theory of value, you don't get too concerned about that because, yes, increasing the money supply weakens the dollar and a weaker dollar raises the price of gold and it's a long term measurement. But you can't measure, you can't say that the money supply went up a certain amount, and gold is going to go up, so there's a subjective element in that.”
“But long term...and economic law says, if you keep printing a lot of paper money, the value of that dollar and currency will go down, and things and most prices will go up and indeed gold always goes up against that currency.”
“But you don't, I don't get in the business of saying in a year or two or three it's going to be two or three or four thousand dollars because it really challenges the basic fundamental beliefs of the Austrian school, to make these kinds of predictions.”
The interview about gold can be watched here
In another interview with CNBC, Dr Paul reaffirmed his view that the nation's monetary and fiscal policies would result in massive inflation. He warned of a stock market crash and of the risk that currency debasement will lead to the continuing devaluation of the dollar.
Ron Paul has long said America should "end the Fed," and he made that case once again on Tuesday.
Ron Paul has long said America should "end the Fed," and he made that case once again on Tuesday.
** Record Low Gold Bar (1 oz) Premiums **
"One thing you have to do is get rid of the Fed, because of the Fed “spin” that leads to volatility in markets. Referring to the statements and spin by Federal Reserve governors, now Janet Yellen, he said that in fact it is a “very inefficient way to operate a market, to have one individual make one statement, and put so much weight on it.”
“In short term, it's very, very real, because people are going to make it or break it, you know, on this interpretation. But that has nothing to do with the free market, nothing to do with building capitalism, and savings, and the things necessary to have a growing economy."
"One thing you have to do is get rid of the Fed, because of the Fed “spin” that leads to volatility in markets. Referring to the statements and spin by Federal Reserve governors, now Janet Yellen, he said that in fact it is a “very inefficient way to operate a market, to have one individual make one statement, and put so much weight on it.”
“In short term, it's very, very real, because people are going to make it or break it, you know, on this interpretation. But that has nothing to do with the free market, nothing to do with building capitalism, and savings, and the things necessary to have a growing economy."
Aluminum Set for Longest Gain in a Decade as Demand Rises
Aluminum was poised for a sixth monthly advance, the longest rally in a decade, on speculation of growing demand from improving economies in China and the U.S., the two biggest consumers of industrial metals.
The contract for delivery in three months on the London Metal Exchange slid 0.3 percent to $2,016 a metric ton at 11:10 a.m. in Tokyo. The metal rose 2 percent yesterday, the most since July 2. Prices are up 6.6 percent this month, the biggest gain since November 2012.
The U.S. economy rebounded more than analysts estimated in the second quarter, growing by an annualized 4 percent. An official gauge of China’s factory output due tomorrow is forecast to show the highest reading this year at 51.4, up from 51 in June. A separate measure from HSBC Holdings Plc and Markit Economics is expected to come in at 52. Numbers above 50 indicate expansion.
“There’s no doubt that sentiment in the metals space is improving,” said Gavin Wendt, founder and senior resource analyst at Sydney-based Mine Life Pty. “The only issue is ensuring that markets don’t get too carried away in the near-term, which means that we will see short-term corrections in price.”
Aluminum, used in everything from aircraft to beer cans, entered a bull market last week. Global demand will exceed supply by 579,000 tons this year, swinging into a deficit after sevens years of surplus, Goldman Sachs Group Inc. said in a report on July 23.
Copper in London fell 0.2 percent to $7,113.50 a ton. The metal is up 1.4 percent this month, a third monthly increase. In New York, futures for September dropped 0.3 percent to $3.2335 a pound, while copper for the same month on the Shanghai Futures Exchange climbed 0.5 percent to 50,560 yuan ($8,190) a ton.
On the LME, zinc fell, while lead, nickel and tin were little changed.
50 Years Old Point Henry Aluminium Smelter to Shutdown Tomorrow
The Point Henry Smelter will close its operation tomorrow after functioning for more than 50 years as an aluminium smelter. The smelter is located near Geelong, Victoria, in the suburb of Moolap.
It is a joint venture between Alcoa World Alumina and Chemicals Australia.
Alcoa has already announced the decision to close the smelter and two rolling mills at Geelong and Yennora due to the pressure caused by the increased Chinese aluminium production and the high value for Australian dollar. As they found it to be economically unviable, Alcoa decided to take the decision of plant closure.
The smelter closure will cause job loss to about 500 employees and 480 employees in the rolling mills. Geelong region is now facing some economies hard times. Ford’s car making center of Geelong will also close down its operations in 2016. The aluminium plant is powered by Anglesea coal mine and power station.
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