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Monday, 7 January 2019




BULLION-
MCX Gold and Silver may note choppy trade in line with the international market but the overall bias is on the upside. COMEX gold trades mixed near $1290/oz after a 0.3% gain yesterday. Gold has turned choppy after testing $1300/oz level for the first time since June 2018. The rally in gold price came to a halt amid improved risk sentiment. Progress over US-China trade talks, upbeat US labour data, Feds patient stance on interest rate hikes and Chinas move to cut reserve requirement rate helped global equity market stabilize. Commerce Secretary Wilbur Ross said there's a "very good chance" the US gets a reasonable deal with China. ETF outflows also show some profit taking in gold. Gold holdings with SPDR ETF fell by 1.47 tonnes to 796.78 tonnes. However, supporting price is the weaker outlook for US dollar amid Feds cautious tone on US economy and patient stance on interest rate hikes. Atlanta Fed President Raphael Bostic said the US central bank should only raise interest rates once this year but keep going with its plan to gradually shrink the balance sheet. While risk sentiment has improved, global uncertainty persists amid a slowdown in the Chinese economy, US government shutdown and Brexit uncertainty. Gold may witness mixed trade as market players await fresh cues. However, we maintain buy on dips view as US dollar is likely to remain choppy while risk sentiment may not improve significantly. COMEX Silver trades weaker near $15.7/oz amid rangebound movement in gold and weakness in industrial metals. Gold has turned choppy amid lack of fresh cues. Industrial metals are pressurized by concerns about the Chinese economy. ETF outflows also show weaker investor interest. Silver holdings with iShares ETF fell by 72.98 tonnes to 9790.1 tonnes, lowest since June 2018. The spot gold-silver ratio rose from 81.9 to 82.4 as silver ended lower yesterday. 

BASE METAL - Basemetal on LME trade sideways to lower today after ending on a higher note yesterday. LME Zinc was the top performer with 2.5% gains following a 0.7% rise in Aluminum prices and 0.4% gains in Nickel prices. In other metals, Copper and Lead too ended modestly higher. The metals pack trades sideways to lower in early trades today after two days of gains amid caution ahead of US-China trade talks outcome. Markets are in a wait and watch mode as they await the outcome of US-China trade talks. The Trump administration has expressed optimism it can reach a reasonable trade deal with China as President Xi Jinping dispatched one of his top aides to negotiations in Beijing. Also putting pressure on the prices is demand worries especially from top consumer China along with and a mixed trend in the global equity market. 


ENERGY -Crude Oil- MCX Crude may note choppy trade in line with international prices but overall bias may be on the upside. NYMEX crude trades mixed near $48.5/bbl after a 1.2% gain yesterday. Crude hit a session high of $49.79/bbl yesterday but retreated to end the day at $48.52/bbl. Crude has rallied more than 15% from recent lows amid lower output from OPEC and recovery in the US equity market. OPECs production fell last month while OPEC and allies have promised adherence to the 1.2 million barrels per day cut deal which will run from January to June. US and global equity market recovered amid upbeat US labour data, Chinas move to cut reserve requirement and progress over US-China trade talks. Also supporting crude is decline in US crude oil rig count which indicates weakening production interest. Early forecasts indicate that US weekly report may note a 1.1 million barrels decline in US crude oil stocks. While crude has recovered sharply from recent lows, the rally will be challenged by higher US output and demand concerns amid uncertainty about US and Chinese economy. US crude production is at record high level and is expected to rise further. Concerns about US economy are high amid mixed economic data, continuing government shutdown and impact on corporate earnings from trade war and higher interest rates. Chinese economic data continues to show a slowdown in the economy. Crude may witness choppy trade amid lack of fresh cues but general improvement in risk sentiment and lower OPEC supply will
support price.Natural Gas- MCX Natural gas may note mixed trade in line with the international market but sell on rising is suggested. NYMEX natural gas trades marginally higher near $2.96/mmBtu after a 3.3% decline yesterday. Lack of fresh cues has resulted in some short covering in natural gas. However, weighing on price is a forecast of mild weather in US which will keep a check on heating demand. Also weighing on price is expectations of another smaller than average decline in gas stocks which will further ease tightness concerns. Natural gas may witness choppy trade amid lack of fresh cues but slack demand expectations may keep the pressure on price. The focus will be on US weather and trend in energy prices. 


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Sunday, 6 January 2019


BULLION:- counter may continue its last week upside momentum following comments by U.S. Federal Reserve Chairman Jerome Powell that the central bank would be patient and flexible in steering the course of interest rates. The Fed chairman on Friday sought to ease market concerns that the U.S. central bank was ignoring signs of an economic slowdown, saying he was aware of the risks and would be patient and flexible in policy decisions this year. Gold can test 31650 in MCX taking support near 31370 in MCX and silver can move further upwards towards 39500. U.S. employers hired the most workers in 10 months in December while boosting wages, pointing to sustained strength in the economy that could ease fears of a sharp slowdown in growth. Gold discounts in India widened to a two-month high last week as prices surged to a more than six-month peak and demand remained subdued due to New Year holidays. Chinese officials will meet their U.S. counterparts for trade negotiations starting later Monday, the first face-to-face talks of the year.

BASE METALS:- prices may continue last week recovery on the hope of trade deal between US and China this week. Copper can take key support near 400 and can recover towards 416. Zambia's Konkola Copper Mines (KCM), majority owned by Vedanta Resources, suspended operations at its Nchanga mine following the introduction of import duty on copper concentrates, the company said. Zambia, Africa's No.2 copper producer, introduced new mining duties, increased royalties and plans to replace Value Added Tax (VAT) with a sales tax by April to help bring down mounting debt. Zinc can recover towards 175 taking support near 168. China's steel and iron ore futures started the week firmly on Monday, buoyed by central bank policy easing and by hopes that talks could help end Sino-U.S. trade tensions. China's central bank on Friday cut the amount of cash that banks have to hold as reserves for the fifth time in a year, freeing up $116 billion for new lending. Lead can take support near 134 and can face resistance near 138. Nickel can take witness further recovery as it can test 785. Aluminium can take improve further towards 131 levels taking support near 128 levels. 

ENERGY:- Crude oil may trade in green as oil prices rose by more than 1 per cent on Monday, lifted by optimism that talks could soon resolve the trade war between the United States and China, while supply cuts by major producers also supported the market. Financial markets were riding a relief rally on Monday on expectations that face-to-face trade negotiations between delegates from Washington and Beijing, due to start on Monday, would lead to an easing in tensions between the two biggest economies in the world. Crude oil can test 3400 while taking support near 3300. Despite the likelihood of a slowdown, crude future prices were being supported by supply cuts started late last year by a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC Russia. Natural gas may open in red as it can tumble lower towards 200 in MCX. The number of rigs drilling for natural gas in the United States remains unchanged this week at 198, data from oil services firm Baker Hughes showed on Friday. Horizontal rigs -- the type most often used to extract oil.


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Thursday, 3 January 2019


BULLION:- Gold hit fresh six months high on tense global equities. US stocks fell nearly 3% on the day. Market participants are watching a partial US government shutdown that is nearing its second week as President Donald Trump's to meet with top lawmakers to discuss reopening the government by resolving a dispute over funding for the expansion of the US-Mexico border wall did not bear any meaningful result. COMEX Gold is currently trading at $1297 per ounce, up marginally on the day. MCX Gold futures ended at Rs 31800 per 10 grams, up 0.60% on the day. The Indian Rupee extended losses yesterday amid weak stock markets. The domestic currency closed around 70.20 per US dollar after testing a two week low above 70.50 marks.

However, the demand concerns in physical markets can come into the picture for Gold in the near term. The US bullion coin sales reported a weak performance for the second year in a row in 2018 despite lower gold and silver prices, according to the latest data released by the US Mint. The sales of American Eagle gold and silver coins were the lowest since 2007, while American Buffalo coins saw a modest recovery from the worst year on record.

BASE METAL:- COMEX Copper slipped amid weak equities and profit selling pressure. Deep losses were seen in American and European markets with the shares in US, Germany and France leading the charge. However, bargain buying lifted the red metal today after the commodity tested near four month low. The red metal currently trades at $2.59 per pound, up 0.75% on the day after a sharp correction yesterday. The MCX Copper futures ended down 1% on the day, closing just above Rs 400 per kg level.

Sentiments stayed lax on uncertainty about US trade policy and concerns over federal government funding of a border wall with Mexico. General concerns about a global economic slowdown also weighed on sentiments. Global cellphone giant Apple Inc cut its quarterly sales forecast for the first time in more than a decade, with Chief Executive Officer (CEO) Tim Cook blaming slowing iPhone sales in China, whose economy has been dragged down by uncertainty around United States (US) - China trade relations.


ENERGY: -Crude oil edged up Thursday amid volatile trade as markets focussed on the talk that Saudi Arabia is likely cutting crude output. Prices have not been able to hold onto their gains this week as soaring US Crude oil output clubbed with corrective equities are hurting the sentiments for the commodity. The WTI Crude futures currently trade at $47.25 per barrel, up 0.30% on the day. MCX Crude should recover on these cues after closing under Rs 3290 per barrel yesterday.

Oil could face selling pressure on further gains. US crude oil output surged to an all-time high of more than 11.5 million barrels per day in October 2018, according to data from the Energy Information Administration (EIA). Crude production rose 79,000 bpd in October to 11.537 million bpd, the US Energy Information Administration said in a monthly report. The EIA revised its September oil production figure down by 17,000 bpd to 11.458 million bpd. US oil production broke its 1970 record of 10.04 million bpd in November 2017, and has set monthly record highs for five straight months since June


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BULLION:- MCX Gold and silver may note mixed trade in line with international market but bias may be on the upside. COMEX gold trades higher near $1290/oz supported by safe haven buying and mixed trade in US dollar. Equity markets are under pressure amid slowdown in Chinese economy, concern about US government shutdown and Brexit uncertainty. Risk sentiment weakened further as Apple cut its first-quarter guidance for the first time in almost two decades, citing an unforeseen slowdown in China and fewer upgrades to iPhone models. Weaker risk appetite pushed market players towards safe haven assets. Gold has tested the highest level since June 2018 while Japanese Yen surged to March 2018 high while US 10-year bond yield has slumped to Jan 2018 lows. The US dollar index trades weaker near 96.5 levels today after a 0.8% gain yesterday. The US dollar is pressurized by lower bond yields, mixed economic data and government shutdown. As per reports, no agreement came out of a meeting between US congressional leaders and President Donald Trump on Wednesday to end a partial government shutdown. COMEX Silver trades mixed near $15.5/oz amid firmness in gold price and mixed trade in industrial metals. Gold is trading near June 2018 highs amid safe haven demand and mixed trade in US dollar. Industrial metals are pressurized by weaker risk sentiment and slowdown in Chinese economy. ETF investors however remained on sidelines indicating lack of confidence in recent price rally. The spot gold silver ratio was little changed from 82.7 to 82.8 as silver as mixed trade in gold and industrial metals is challenging silvers rise. Silver may witness choppy trade along with gold but the general bias is on the upside.

ENERGY :- Crude Oil- MCX Crude may note some decline tracking cues from international exchange. NYMEX crude slipped more than 1% to trade near $45.5/bbl. Crude weakened today after a sharp 2.5% rally in the previous session. Mixed factors and low volume trading near New Year holidays has resulted in volatility in crude oil. Supporting crude price is decline in OPECs production last month and expectations of another decline in US crude oil stocks. As per Bloomberg reports, OPEC production fell 530,000 barrels a day to 32.6 million a day last month. It's the sharpest pullback since January 2017. Reports yesterday also noted that Saudi exports in December fell by about half a million barrels per day to stand at 7.253 million barrels per day. However, weighing on price are oversupply concerns amid record high US production.

Natural Gas- MCX Natural gas may note mixed trade in line with the international market but sell on rising is suggested. NYMEX natural gas trades mixed near $2.95/mmBtu after a 0.6% gain yesterday. Natural gas has turned choppy after the sharp decline in last few days amid lack of fresh cues. However, weighing on price if forecast of warmer weather in parts of US which will keep a check on heating demand. Also weighing on price is expectations of another smaller than average decline in US gas stocks. EIA report due Friday is expected to note a 50 Bcf decline in gas stocks as against 5-year the average decline of 107 Bcf. Natural gas may witness choppy trade as market players assess recent sell-off against the possibility of cold weather later in winter but sell on rising is suggested amid subdued current demand.

BASE METAL:-Most base metals on LME trade sideways to higher today after a steep slide yesterday. LME Lead was the worst performer with 3.3% drop followed by 2.65% slide in Aluminium prices and 2.3% decline in Zinc prices. In other metals Copper too ended 2.1% lower however Nickel prices noted a divergent trend to end 1.7% higher. Most metals trade sideways to higher in early trades today as prices take a breather after yesterdays slide. Also lending support to the prices is the general weak trend in US Dollar.



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Wednesday, 2 January 2019



BULLION:- MCX Gold and Silver may note mixed trade in line with international market however bias may be on the upside. COMEX gold trades in a narrow range near $1280/oz awaiting fresh cues. Gold witnessed a good recovery in the last quarter of 2018 but still ended the year with a minor decline, its first fall since 2015. Gold has started the year 2019 on a steady note awaiting more clarity on US government shutdown and US-China trade talks. As per reports, President Donald Trump invited the top congressional leaders from both parties to a White House briefing on border security Wednesday and suggested he wants to "make a deal" to end the government shutdown. If government restarts functioning normally, we may see some improvement in US economic outlook which will be positive for US dollar and negative for gold. US-China trade talks are progressing well however market players are still not hopeful of a deal in the near term. Meanwhile, goldâs safe-haven demand is high amid slowdown in Chinese economy, Brexit uncertainty and mixed US economic data. Chinas manufacturing PMI has dipped below 50 levels indicating contraction in the sector. US-North Korea tensions rose as North Korean leader Kim Jong Un warned he may have to take an alternative path if US sanctions and pressure against the country continued. The US dollar is also pressurized by lower bond yields amid reduced expectations of aggressive rate hikes by Fed next year. Gold ETF investors moved to sidelines after recent inflows awaiting more cues. Gold may witness choppy trade reflecting choppiness in US dollar and equity market however bias may be on the upside as risk sentiment is unlikely to improve significantly.



ENERGY:- Crude Oil- MCX Crude may note mixed trade in line with international market but sell on rise is suggested. NYMEX crude trades mixed near $46 per barrel amid lack of fresh cues. Crude plunged nearly 25% last year marking its first decline since 2015. Crude has gained support from supply issues relating to Libya and expectations that US government may start working fully soon enough. As per reports, Libyas Es Sider and Brega port terminals are closed due to bad weather, causing a partial slowdown of Waha Oil Co production. Reports indicated that US President Trump has invited leaders for talks to end government shutdown. OPEC and non-OPEC agreement to cut output by 1.2 million barrels per day will run from January to June and is expected to help reduce oversupply in global market. However, weighing on price is record high US crude output and concerns about health of US and Chinese economy. US crude production hit fresh record high levels in October. Chinas manufacturing PMI has dipped below 50 levels indicating contraction in the sector. Crude may witness choppy trade amid lack of clear cues and as market players await more clarity on impact of OPECs production cut deal however we maintain sell on rise view as risk sentiment remains weak and oversupply concerns persist



Natural Gas- MCX Natural gas may note some decline tracking cues from international exchange. NYMEX natural gas has gained more than 2% to trade near $3/mmBtu levels after a sharp 11% decline in previous session. Natural gas has fallen sharply in last few days and we are seeing some short covering. However, weighing on price is forecast of moderate weather in US which will keep a check on heating demand. US gas stocks are well below average levels but higher production and moderate demand has led to smaller than average decline in last two weeks. Natural gas has fallen sharply in last few days and some rebound is possible however we maintain sell on rise view on expectations of moderate demand.



BASE METAL:- Base metals on LME trade sideways to lower today as trading resumed after New Year Holiday yesterday. The metals pack continues to edge lower having ended 2018 sharply down. Weighing on the prices is demand worries from top consumer China tracking recent spate of weak data. In China, private survey data today showed that factory activity contracted for the first time in 19 months in December as domestic and export orders continued to weaken. Chinas Caixin Manufacturing PMI fell to 49.7 in December; lowest since May 2017, following November 50.2. Earlier in the week, Official Mfg. PMI from China too showed that factory activity contracted with Decembers Mfg. PMI falling to 49.4 from Novembers 50.

Prices may further come under pressure amid fragile risk sentiment as is evident from weakness in Asian equity markets.Asian indices trade with a weaker bias in early trades today weighed down by global growth worries and bleak macroeconomic data from China



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Tuesday, 1 January 2019



Bullion counter may trade with sideways to upside bias as gold has regained its safe-haven appeal because of turmoil in financial markets. Gold can take support near 31200 and can face resistance near 31450 in MCX. While silver can take support near 38300 and can face resistance near 39100. In the recent past, much of the increased buying pressure in gold is being driven by geopolitical tensions threatening to disrupt global markets, along with uncertainty in stock prices. The US President Donald Trump sent positive signals to ease US-China trade tensions, which eventually dented the precious metal's safe-haven status to some extent. Expectations of a dovish Fed next year, along with a partial US government shutdown kept the USD bulls on the defensive and continued benefitting the dollar-denominated commodity. China's net gold imports via main conduit Hong Kong rose 28 per cent in November from the previous month to their highest since July. Democrats in the U.S. House of Representatives plan to vote on Thursday on a funding package to end the 10-day-old partial U.S. government shutdown, without providing the $5 billion President Donald Trump has demanded a U.S.-Mexico border wall.


Base metals prices may trade with weak bias tracking subdued international markets. Copper can face resistance near 415 and can slip lower towards 405-400 in MCX. Chile's copper production touched 540,720 tonnes in November, its highest level in 13 years, as ore grades and efficient processing favoured increased output in the world's top producer of the red metal, the government said on Monday. Zinc can face resistance near 175 and support near 168. Lead can take support near 138 and can face resistance near 142. Nickel can take support near 730 while its upside will be capped near 750. Aluminium can take support near 125 levels while it has resistance near 130 levels. The London Metal Exchange (LME) confirmed on Monday it would lift its suspension on aluminium produced by Russia's Rusal if U.S. sanctions are lifted, saying a consultation with users had not raised any objections to the plan.


Crude oil may trade with firm note as crude oil can test 3280 taking support near 3150 n MCX. U.S. crude oil output hit an all-time high of more than 11.5 million barrels per day in October, according to government data released on Monday. Hints of progress on a possible U.S.-China trade deal, with U.S. President Donald Trump saying he had a very good call with Chinese President Xi Jinping, helped bolster sentiment for oil. For most of 2018, oil prices were on the rise, driven up by healthy demand and supply concerns, especially around the impact of renewed U.S. sanctions against major producer Iran, which were introduced in early November. The current downward pressure on oil prices should likely taper off from January as the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia start curbing production by 1.2 million barrels per day (bpd). Natural gas may remain subdued on the warmer weather forecast in US as it can take tumble lower towards 205 in MCX. U.S. natural gas output in the lower 48 states rose to 96.65 billion cubic feet per day (bcfd) in October from a revised 95.96 bcfd in September.


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Monday, 31 December 2018


BULLION: -Gold prices fell slightly on Monday as Asian equities benefited from hints of progress on the long-drawn China-U.S. trade spat, while the dollar held steady in a narrow range. U.S. gold futures dipped 0.1 percent to $1,282 per ounce. The dollar index, a gauge of its value versus six major peers, held a narrow range in thinly traded markets. U.S. President Donald Trump said he held a very good call with Chins President Xi
Jinping on Saturday to discuss trade and claimed big progress was being made. The Wall Street Journal reported negotiators were starting to work out a deal that could boost U.S. exports and loosen regulations that stifle U.S. firms in China. North Korean leader Kim Jong Un said he wants to hold more summits with South Koreas Moon Jae-in next year to achieve the goal of denuclearization of the Korean peninsula, Moons office said
on Sunday. The European Union is not trying to keep Britain in and wants to start discussing future ties the moment the UK parliament approves Brexit, partly to focus on its own unity ahead of May elections, the head of the blocs executive said. U.S. Senator Lindsey Graham said on Sunday that he was optimistic that Republicans, Democrats and President Donald Trump could reach a deal to end a government shutdown that includes
border wall funding and legal status for some undocumented immigrants. Physical gold demand lacked vigour in most Asian hubs last week as limited safe haven interest failed to lift activity into the year-end, while jewellers in India stepped up purchases, hoping for a further leg to a rally in
domestic rates.

ENERGY:-Oil prices edged higher on the last trading day of the year on Monday, taking a cue from firmer stock markets, but remain on track for the first yearly decline in three years amid concerns of a supply glut. Hints of progress on a possible U.S.-China trade deal helped bolster sentiment, which has been battered by concerns over a weaker global economic outlook. Brent crude futures the international benchmark for oil prices - rose
17 cents, or 0.3 percent, to $53.38 a barrel. Brent has shed about 20 per cent in 2018 following two years of successive growth. U.S. West Texas Intermediate (WTI) crude futures were at $45.75 a barrel, up 42 cents, or 0.93 per cent, from their last close. WTI is down nearly 25 percent this year. Crude prices have been closely tracking equity markets during volatile trading for both asset classes last week. Meanwhile, imports of Iranian
crude oil by major buyers in Asia hit their lowest in more than five years in November as U.S. sanctions on Irans oil exports took effect last month. Asia's imports from Iran are set to rise again in December after the U.S. granted temporary waivers to some countries, but is not known how much Iran will be able to export once the waivers expire around the start of May. arlier this month, the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, agreed to curb output by 1.2 million bpd starting in January in a bid to clear a supply overhang and
prop up prices.

BASE METALS:-Copper inched up on Friday for its first weekly rise in five weeks as gains on global equity markets rekindled interest in riskier assets and a weaker dollar made metal cheaper for buyers with other currencies. Benchmark copper on the London Metal Exchange (LME) closed up 0.2 percent at $5,997 a tonne and around 0.2 per cent higher for the week. Still, concerns over slowing economic growth in China, the biggest metals consumer, have left copper down 17 per cent over the year as a whole. Chinas manufacturing sector is expected to have contracted for the first time in more than two years in December, a poll found. Data this week showed earnings at Chinese industrial firms in November dropped for the first time in nearly three years. China and the United States plan face-to-face consultations on trade in January, the Chinese commerce ministry said. Worries that trade tariffs will curtail demand for metals have dragged prices lower this year.


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