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Tuesday, 16 October 2018


BULLION:-

There Gold prices held steady on Wednesday despite a rise in equities, with investors waiting for minutes from the US Federal Reserve's latest policy meeting for any fresh clues on the pace of interest rate hikes. Spot gold was up 0.1 per cent at $1,224.70 an ounce at 0100 GMT. On Monday, it touched its highest since July 26 at $1,233.26 an ounce. US President Donald Trump heaped more criticism on the Fed in an interview with Fox Business Network on Tuesday, extending his discontent beyond its chairman, Jerome Powell, whom he has frequently critiqued in public. Past US presidents have been reticent to criticize the central bank because its independence is seen as important for economic stability. But Trump in the past week has called the Fed "crazy," "loco," "ridiculous," and "too cute". Asian equities got some much needed relief on Wednesday after upbeat US earnings reports drove a rebound on Wall Street and helped restore a little confidence in emerging market stocks and currencies. 

METALS:-

On Tuesday, bargain-seekers pushed up LME copper to the daily moving average from early lows before a rally in US stocks rally that was fuelled by earnings and weighed on the dollar further bolstered LME copper to a high of $6,252.5/mt. The contract fell back to the daily moving average by close. The SHFE 1811 contract traded range bound in negative territory overnight. China factory prices slowed in September, indicating a potential slowdown in profit growth across Chinese manufacturers in the fourth quarter amid the ongoing trade war with the US. This is set to weigh on copper prices. LME copper is likely to trade at $6,200-6,250/mt today with SHFE copper at 50,000-50,500 yuan/mt. In the physical market, sellers are keen to cash in under the pressure from cash flows and existing stocks while downstream consumers hold back from purchases. While sellers lowered offers, trades remain sluggish. Spot discounts are seen at 60-20 yuan/mt today.


ENERGY:-

Oil prices extended gains into a fourth session on Wednesday, buoyed as industry data showed a surprise decline in U.S. crude inventories and as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked supply worries. U.S. West Texas Intermediate crude CLc1 was up 15 cents, or 0.2 percent, at $72.07 a barrel by 0255 GMT on Wednesday, having settled up 14 cents. U.S. crude inventories fell by 2.1 million barrels last week, compared with analyst expectations for a build of 2.2 million barrels, American Petroleum Institute data showed after Tuesday's settlement. U.S. gasoline stocks dropped by a larger-than-expected 3.4 million barrels, while distillate fuel stockpiles declined by a smaller-than-expected 246,000 barrels, the API data showed.




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Monday, 15 October 2018


BULLION:-
There Gold prices inched higher early on Tuesday, hovering near a 2-1/2 month high hit in the previous session, as risk averse investors sought a safe haven amid rising political tensions and economic uncertainty. Spot gold was up 0.1 per cent at $1,227.76 an ounce at 0114 GMT. On Monday, it touched a peak of $1,233.26, the highest since July 26. Asian stocks bounced modestly on Tuesday, gaining a toe-hold after a week of heavy losses, although increasing tensions between Saudi Arabia and the West fanned geopolitical concerns and capped gains. The US government closed the 2018 fiscal year $779 billion in the red, its highest deficit in six years, as Republican-led tax cuts pinched revenues and expenses rose on a growing national debt, according to data released on Monday by the Treasury Department. 

METALS:-
London copper closed near its day lows at $6,253/mt on Monday as longs booked profits after the contract climbed to an intraday high of $6,342/mt. With bearish sentiment from weakness in the equity markets, longs booked profits after the SHFE 1811 contract crept to a high of 50,960 yuan/mt and hovered around the daily moving average. This dragged the contract down to close at a low of 50,480 yuan/mt overnight. The pessimistic sentiment, triggered by the equity rout, lingered and this slowed the growth in copper prices. However, China's robust exports in September and low stocks across LME, COMEX and SHFE warehouses could provide some support. On technicals, LME copper touched the 10-day moving average and its Bollinger bands appeared to converge; SHFE copper stood firmly above the five-day moving average. We expect LME copper to trade at $6,190-6,280/mt today with the SHFE 1811 contract at 50,500-51,000 yuan/mt. Spot prices are seen at discounts of 20 yuan/mt to premiums of 30 yuan/mt.

ENERGY:-

Oil prices rose on Tuesday on signs Iranian oil exports this month have fallen from September ahead of U.S. sanctions against Tehran that are set to start in November. Iran has exported 1.33 million barrels per day (bpd) to countries including India, China and Turkey in the first two weeks of October, according to Definitive Eikon data. That was down from 1.6 million bpd in September, the data showed. October exports are a sharp drop from the 2.5 million bpd exported in April before U.S. President Donald Trump withdrew from a multi-lateral nuclear deal with Iran in May and ordered the re-imposition of economic sanctions on the country, the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC).


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Sunday, 14 October 2018


BULLION:-

There were a recent combination short covering and a flight to safety that lead to gold's rapid increase in price with the precious metal climbing through the descending channel's resistance to set a fresh high of $1,226/oz up from $1,180 recent double bottom lows. However, US equity markets set a firmer tone on Friday with respect to investor risk appetite which leaves gold bulls exposed to the risk of a deeper correction should market's continue to recover - Gold had already retreated back to $1,216 which has been marked out by the bears in the last two full day's of trade since its advance.  Eyes will stay focussed on US rates, the US dollar and stock markets with investor sentiment on shaky grounds considering the heightened tensions with respect to global trade relations and geopolitical risks

METALS:-

London copper reversed some early gains on Friday as the dollar climbed. The SHFE 1812 contract on Friday night fell below the daily moving average and ended at 50,720 yuan/mt after it rose to a high of 51,090 yuan/mt. Copper prices recovered as the markets settled from the US equity rout. In late trading on Friday, LME nickel lost all the gains it made earlier in the day and fell to a low of $12,610/mt before hovering around $12,670/mt and settling at $12,685/mt. The SHFE 1811 contract on Friday night rebounded to hover around 105,000 yuan/mt and end at 104,950 yuan/mt after it fell to a low of 104,430 yuan/mt. SHFE nickel prices are likely to remain rangebound as supply and demand both grow. LME nickel is expected to hover around $12,650/mt today and the SHFE 1811 contract is expected to trade at 104,000-106,000 yuan/mt. Spot prices are seen at 104,000-111,000 yuan/mt

ENERGY:-


Crude oil futures rose on Monday as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked worries about supply, although concerns about the long-term outlook for demand dragged on prices. "The market has again expressed concerns over geopolitical tensions in the Middle East after U.S. and Saudi traded comments over the disappearance of the Saudi journalist, leading to a jump in prices," Wang Xiao, head of crude research with Guotai Junan Futures, wrote in a research note. Saudi Arabia has been under pressure since Jamal Khashoggi, a prominent critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul. Kingdom would retaliate against possible economic sanctions taken by other states over the case, its state news agency SPA reported on Sunday quoting an official source.


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Thursday, 11 October 2018


BULLION:-
Gold edged down on Friday but held near an over two-month high hit in the previous session, when prices surged over 2 percent as a rout in global stock markets boosted the metal's safe-haven appeal. Spot gold was down 0.2 percent at $1,221.06 an ounce at the time of writing. On Thursday, it jumped about 2.5 percent after marking its highest since July 31 at $1,226.27. That was also the metal's best one-day percentage gain since June 2016. U.S. gold futures were down 0.3 percent at $1,224.50 an ounce. Worries about the economic impact of the Sino-U.S. trade war, a spike in U.S. bond yields this week and caution ahead of earnings seasons have all been cited as potential reasons behind the selloff, the biggest market rout since February.

METALS:-
London aluminium steadied on Friday after metals were caught in a widespread market sell-off this week, but it was set for its biggest weekly drop since June as concerns over raw material costs eased. LME aluminium had edged up 0.3 percent to $2,027 a tonne at the time of writing - still holding above the $2,000 level that has been its base since April. Prices were on course for a loss of nearly 4 percent this week, extending 2018's drop to 11 percent. Putting downward pressure on raw material costs, aluminium maker Norsk Hydro said it would resume half production at its giant Brazilian alumina plant, just days after declaring it would shut down completely. Shanghai Futures Exchange copper rose half a percent to 50,450 yuan ($7,312) a tonne. Open interest in China's copper contract is the lowest in 15 months. U.S. President Donald Trump warned on Thursday there was much more he could do that would hurt China's economy further, showing no signs of backing off an escalating trade war with Beijing.  

ENERGY:-

Oil prices steadied on Friday after a market rout driven by sharp falls in equity markets and indications that supply concerns have been overblown, but were still on track for a fall or more than 4 percent for the week. U.S. West Texas Intermediate (WTI) crude futures were up 11 cents at $71.08 a barrel, after falling 3 percent in the previous session to the lowest since Sept. 21. U.S. crude inventories rose by 6 million barrels last week, the Energy Information Administration said, more than double analysts' expectations of a 2.6 million-barrel increase. The Organization of the Petroleum Exporting Countries cut its forecast of global demand growth for oil next year for a third straight month, citing headwinds facing the broader economy from trade disputes and volatile emerging markets. OPEC sees the oil market as well supplied and is wary of creating a glut next year, the group's secretary-general said on Thursday.


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Wednesday, 10 October 2018


BULLION:-

Gold prices edged higher in the morning session as some investors sought refuge in the precious metal after the global stocks tumbled and the U.S. dollar weakened. Spot gold rose 0.4 percent to $1,194.12 per ounce at the time of writing. U.S. gold futures settled up $1.9, or 0.16 percent, at $1,193.4. Stocks on major world markets fell to a three-month low, with the benchmark S&P500 stock index falling more than 3 percent, in its biggest one-day fall since February. The U.S. dollar index retreated from a seven-week peak hit in the previous session. Gold, however, has fallen over 13 percent since hitting a peak in April, with investors increasingly opting for the safety of the greenback as the U.S.-China trade war unfolded against a backdrop of rising U.S. interest rates. Rising bond yields have also dampened the appeal of gold, which pays no interest. Higher U.S. Treasury yields can translate into more demand for the dollar, making bullion more expensive for holders of other currencies. U.S. Treasury yields held near multi-year highs after government data showed the U.S. producer price index (PPI) climbed in September, which reinforced expectations that the Federal Reserve would continue raising interest rates.  

METALS:-

Zinc fell in the previous session on trade and inflation worries, although it had earlier risen back towards a 3-month high reached last week on shrinking inventories and smelter cuts in China. Zinc inventories in LME-registered warehouses fell to 194,575 tonnes from more than 250,000 tonnes in August and are nearing 10-year lows. Stockpiles in Shanghai Futures Exchange storehouses at 29,204 tonnes are the smallest since 2007. Also weighing on zinc were lingering worries that trade tensions will sap growth. The worries, coupled with rising U.S. bond yields, pushed world shares down to a three month low. Demand for refined zinc will exceed supply by 322,000 tonnes this year, but the gap will narrow to 72,000 tonnes in 2019, industry data showed on Monday. The premium of cash zinc over the three-month contract rose to $41.50, reversing recent falls and signaling a lack of nearby supply.  

ENERGY:-

Oil dropped on Thursday to extend big losses from the previous session as global stock markets suffered a rout, with crude prices also taking a hit from a weekly industry report showing U.S. crude inventories had risen more than expected. Supply worries also eased as Hurricane Michael likely spared oil assets from significant damage as it smashed into Florida, even as it caused injuries and widespread destruction. U.S. West Texas Intermediate (WTI) crude futures were down 57 cents, or 0.8 percent, at $72.60 after dropping 2.4 percent in the previous session. U.S. crude stockpiles rose more than expected last week, while gasoline inventories increased and distillate stocks drew, industry group the American Petroleum Institute said on Wednesday. Crude inventories climbed by 9.7 million barrels in the week to Oct. 5 to 410.7 million, compared with analyst expectations for an increase of 2.6 million barrels. Crude stocks at the Cushing, Oklahoma delivery hub rose by 2.2 million barrels, API said. The U.S. Energy Information Administration (EIA) is due to release official government inventory data today at 08.30 PM IST. In the U.S. Gulf of Mexico, producers have cut daily oil production by roughly 42 percent due to the storm, the Bureau of Safety and Environmental Enforcement said.  


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Tuesday, 9 October 2018


BULLION:-
Gold The dollar index, which measures the greenback against a basket of six major currencies, was down 0.1 per cent. Stocks on major world markets edged lower on Tuesday, with a decline in the materials sector offsetting rising energy shares. US long-dated Treasury yields fell on Tuesday in choppy trading, as investors took a respite from selling bonds that took rates to multi-year highs following recent economic data and on interest rate prospects over the next year and a half. Risks to the global financial system have risen over the past six months and could increase sharply if pressures in emerging markets escalate or global trade relations deteriorate further, the IMF said on Wednesday

METALS:-
The SHFE 1811 contract also performed strongly overnight. It jumped past 107,000 yuan/mt to the highest since September and ended at 106,950 yuan/mt. The metal was voted as the most promising base metal for 2019 at this year's LME week in London, which might account for the recent increases in prices of futures. We expect LME nickel to hover at $12,800/mt today with the SHFE 1811 contract trading at 105,500-107,500 yuan/mt. Spot prices are seen at 105,000-112,000 yuan/mt. London copper rebounded above the daily moving average to a high of $6,303.5/mt and settled at $6,295/mt on Tuesday after the dollar dipped when US bond yields fell. On the technical front, LME copper managed to stand firmly above the five- and 10-day moving averages and approached the upper Bollinger band. Its MACD red line extended, reflecting the strength of longs. The SHFE 1811 contract soared to a high of 51,140 yuan/mt after it hovered at the daily moving average overnight.

ENERGY:-
Oil prices edged lower on Wednesday after the IMF lowered its global growth forecasts but prices were supported as Hurricane Michael churned towards Florida, causing the shutdown of nearly 40 percent of U.S. Gulf of Mexico crude output. Trade tensions and rising import tariffs were taking a toll on commerce, while emerging markets struggle with tighter financial conditions and capital outflows, the IMF said are peaking at the most opportunistic time given waning global growth narrative," said Stephen Innes, head of trading APAC at OANDA in Singapore. In the United States, nearly 40 percent of daily crude oil production was lost from offshore U.S. Gulf of Mexico wells on Tuesday because of platform evacuations and shut-ins ahead of Hurricane Michael



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Monday, 8 October 2018


BULLION:-

Gold fell to its lowest level in a week on Monday as investors sought safety in the U.S. dollar on concerns about a selloff in global stocks worsened by worries over economic growth in China. "The strong U.S. dollar and expectations of more interest rate hikes are pushing gold down and scaring gold investors. Even the Italian risk and a weakness in equities is not pushing investors to buy gold," said Carlo Alberto De Casa, chief analyst at Active Trades. Despite the losses, gold has held in a $34 range for the last 1-1/2 months, which some analysts say suggests resilience, worries over the damage to emerging market economies from higher U.S. interest rates has spurred safe-haven bidding.

METALS:-

London copper rebounded to a high of $6,224.5/mt from a low of $6,126/mt on Monday. This helped it stand firmly above the 20-day moving average. The SHFE 1811 contract reversed some gains overnight after hitting a high of 50,320 yuan/mt, which was near the five-day moving average. China’s actions, including a steep cut in the amount of cash that banks must hold as reserves, quickening special bond issuance for shanty-town redevelopment, an increase in export tax rebates from November 1, supported copper prices in the domestic market. Stocks at home and abroad continued their declines. We expect LME copper to trade at $6,170-6,230/mt with the SHFE 1811 contract at 50,000-50,500 yuan/mt. Spot premiums are seen at 40-80 yuan/mt.

ENERGY:-

Oil prices rose on Tuesday as more evidence emerged that crude exports from Iran, OPEC's third-largest producer, are declining in the run-up to the re-imposition of U.S. sanctions and as a hurricane moved across the Gulf of Mexico. Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers are seeking alternatives ahead of the start of the U.S. sanctions on Nov. 4 and creating a challenge to other OPEC oil producers as they seek to cover the shortfall. The Islamic Republic exported 1.1 million barrels per day (bpd) of crude in that seven-day period, Definitive Eikon data showed. An industry source who also tracks exports said October shipments were so far below 1 million bpd.


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