Commodity Research Report Ways2Capital 4 Octt 2017

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Spot gold declined by 0.66 percent on Monday to close at $1270.7 per ounce while Indian markets were closed on 2nd October on account t of Gandhi Jayanti. MCX gold prices declines by 1.2 percent last week to close at Rs.29557 per 10 gms. Stronger dollar on account of good economic data from the US coupled with expectations that the US FED will push the button for the rate hike this December led to the fall in gold prices in the recent weeks. The euro also came under pressure after Spanish police used batons and rubber bullets to thwart an independence vote in Catalonia on Sunday, leaving hundreds injured. The single currency was down 0.6 percent versus the dollar on Monday. Speculators cut their net long positions in COMEX gold and silver contracts in the week to Sept. 26, further exerting downside pressure on gold. MCX Gold and Silver may note choppy trade in line with international market but bias may be on the downside. COMEX gold trades mixed near $1285/oz after testing the lowest level since mid-Aug. Supporting gold price is continuing tensions relating to North Korea and ETF inflows which show higher investor interest. However, weighing on price is increased expectations of Fed’s interest rate hike and optimism about US economy. Gold has fallen sharply in last few days and we are now seeing some consolidation due to lack of fresh cues. Position squaring ahead of weekend, month end and quarter end could add to choppiness in price. Hence we suggest waiting for higher levels to go short in gold. COMEX Silver trades mixed near $16.9/oz amid rangebound movement in gold and mixed trade in industrial metals. Gold has turned rangebound amid lack of fresh cues. Industrial metals are mixed but remain supported by demand optimism. Silver ETF investors have moved to sidelines after brief inflows earlier this week. Risk sentiment may result in mixed trade in gold and industrial metals keeping silver price choppy but bias may be on the downside.

✍ BASE METAL
Base metals on LME trade choppy in early trades today after most metals ended on a higher note yesterday. LME Nickel was the best performer with 1.95% gains followed by more than 1.3% rise in Copper and Zinc prices. In other metals, Lead ended 0.3% higher while Aluminium closed almost unchanged. The metals pack trades choppy today amid mixed cues. On positive note lending support to the prices is hope of robust demand from top consumers China and US. Also supporting prices is expectation of improvement in liquidity in China as the nation plans to expand a program to ease reserve requirements for banks lending to small businesses. Meanwhile on fundamental front, falling stocks at exchange warehouses and signs of tightness in case of most metals may also lend support to the prices. Meanwhile Aluminium, Lead and Zinc prices may also seek support from worries over lower production from China due to winter related output curbs. According to a report from SMM, Zinc galvanizing plants in northern China have been cutting output this month during environmental checks. Big-size plants are running at approx. 70% of capacity, while medium-to- small plants are running at approx. 45%. However capping the upside is recent rebound in US Dollar and lingering worries over North Korea. US Dollar hit highest level in one month amid rising odds of December rate hike and proposed tax overhaul in US. In case of Copper, prices may also come under pressure amid signs of ample supplies in physical market as market participants release inventories in South Korea due to geopolitical tensions on the peninsula while Nickel prices may also come under pressure amid demand uncertainty from China along with signs of rising supply from Indonesia and high inventory overhang.On Monday, LME Copper prices rose 0.2 percent in absence of major economic data and Chinese markets on the eve of Golden week holiday. Last week, LME Copper prices surged 0.7 percent to close at $6493/t as National Bureau of Statistics said that the profits of China’s industrial firms registered the fastest growth in four years in August buoyed by rising product prices and falling costs. Also, decline in LME stocks for seven consecutive sessions pushed the inventories lower by around 5 percent with most withdrawals at South Korean warehouses. Also, BHP-controlled company said Escondida mine in northern Chile, the world’s largest copper operation, produced 327,863 mt of copper, in the first six months of the year, declining 39% on the year. However, limited risk appetite owing to fiery war of words between the US and North Korean President restricted sharp upisde

✍ ENERGY
Crude Oil- MCX Crude may note mixed trade in line with international market but bias may be on the upside. NYMEX crude has turned choppy after testing the highest level since March. Supporting price is optimism about US economy, tensions in Iraq’s Kurdish region, recovery in US refinery demand, decline in US crude stocks and expectations that OPEC may extend production cuts. However, weighing on price is higher US crude production, recent gains in US dollar and mixed economic data from major economies. Crude has rallied sharply in anticipation of OPEC’s production cut extension but we are seeing signs of exhaustion hence we suggest waiting for lower levels to buy. Focus today will be on US economic data and US weekly crude rig count. WTI oil prices declined by more than 3 percent last week while prices declined by 2.1 percent on Monday to close at $50.6 per barrel. Indian markets were shut yesterday on 2nd October for Gandhi Jayanti, MCX oil prices declined 1 percent to close at Rs.3376 per barrel Rise in U.S. drilling and higher OPEC output put the brakes on a rally that helped prices notch their biggest third-quarter gain in 13 years. Iraq announced its exports rose slightly in September while a Reuter’s survey showed OPEC overall boosted output. U.S. drillers added six oil rigs in the week to Sept. 29, bringing the total count to 750, data from General Electric Co’s Baker Hughes energy services firm showed on Friday Natural Gas- MCX Natural gas may note mixed trade in line with international market but bias may be on downside. NYMEX natural gas trades in a narrow range near $3/mmBtu after yesterday’s decline. Prices are under pressure as market players are focusing on slack weather demand during fall season. However, supporting price is smaller than average rise in gas stocks and forecast of hot weather in US over next few days.

NCDEX – WEEKLY MARKET REVIEW
✍ SPICE COMPLEX
Jeera and Turmeric at NCDEX resumed its upswing tracking strong fundamentals. Dhaniya futures faced resistance at higher levels due to profit booking. Cardamom at MCX (Oct) extended losses due to profit booking. Prices of Turmeric are likely to extend its upswing and Cross Rs. 8000/qtl levels in coming sessions at NCDEX (Oct) futures on expectation of lower output due to unsupportive weather conditions in major growing areas. Prices of Jeera are likely to get support at lower levels and test resistance of Rs.20050/qtl at NCDEX (Oct) due to low availability of stock in physical market and quality concerns. Downside in

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