Commodity Research Report By Ways2Capital 01 Oct 2014

INDORE, India - Oct. 1, 2014 - PRLog -- MCX - WEEKLY NEWS LETTERS

✍ INTERNATIONAL NEWS

Asian markets are trading on a negative note today on the back of unfavorable economic data from the US in yesterday’s trade.

The US Dollar Index (DX) traded on a positive note and gained around 0.2 percent in yesterday’s trade on the back of weak market sentiments which led to increase in demand for the low yielding currency. Further, unfavorable economic data from the country exerted downside pressure on the DX. The currency touched an intra-day high of 85.62 and closed at 85.30 on Thursday.

US Core Durable Goods Orders grew by 0.7 percent in August as against a decline of 0.7 percent in July. Durable Goods Orders plunged by 18.2 percent in last month from rise of 22.6 percent in July. Unemployment Claims increased by 12,000 to 293,000 for the week ending on 19th Aug’14 with respect to 281,000 in the previous week.

US Core Durable Goods Orders grew by 0.7 percent in August.

LME Copper stocks fell by 0.3 percent on Wednesday.

Euro Zone Money Supply gained around 2 percent in the last month.

UK’s CBI Realized Sales plunged by 6 points to 31-mark in September

Precious Metals

Gold once again saw good fall wherein the metal slipped to its lowest levels since Dec during intraday however recorded good pullback with rising in volumes at Comex. Gold Dec Comex by end of day finished higher by 0.20% to $1222 per ounce while touched intraday low near $126 per ounce. MCX Gold October though closed 1.45% higher adjusting with Rupee and last two day’s performance in Comex to Rs 26935 per 10 Gms

Gold extended its drop to multi-month lows wherein we have been maintaining bearish scenario for many weeks backed by reasons 1.) Weaker physical demand in particularly China and India the two major markets for Gold. Though monthly Gold imports in India increased sharply for August government data shows, overall they still continue to be lower than our long-term and last year’s average. On looking at ETF demand side, the SPDR Gold holdings maintain below the 800 MT mark; around the 2009 year low. 2.) Persistently rising equities across the major western economies have negative effect on gold. US equities continue to hover near record levels whereas locally too, we are seeing Indian Nifty and Sensex making fresh records which indirectly affects investment demand for gold. 3.) Subdued inflationary movement in mainly China and EU region where CPI and PPI numbers continue to disappoint. Adding to the above developments, previous week we had talked about the important FOMC meeting and its implications on the USD along with Bullion complex which usually have inverse relationship. One of the major reasons behind fall in gold this week could be taken as Fed updates and comments. Fed officials increased their median estimate for federal funds rate to 1.375% by 2015 end, versus June’s forecast for 1.125%. Rising interest rate scenario makes a highly bearish case for gold which has been a major beneficiary of the easy monetary policy of the US Fed in last couple of years. Overall we feel the aforementioned factors would continue to weigh the Bullion complex as a whole in next week as well.

Base Metal

Base metals on the LME traded on a negative note in yesterday’s trade because of a strong dollar that climbed to fresh four-year peak and worries that weak global growth will curb demand.

Further, weak durable goods orders data and unemployment claims data from the US acted as a negative factor. In the Indian markets, base metals traded lower but Rupee depreciation cushioned sharp downside.

Copper, the leader of the base complex dropped to a 14-week low and fell by 0.6 percent after a report showed demand for durable goods in August tumbled by a record in the U.S., the world’s second-biggest consumer of the metal. Further, strength in the DX which jumped to fresh 4-year high acted as a negative factor.

However, sharp downside in the prices was prevented due to fall in LME Copper inventories by 0.3 percent in yesterday’s trade.

In the Indian markets, copper prices rose around 0.4 percent owing to depreciation in the Rupee.

Energy

Nymex crude oil prices declined around 0.3 percent in yesterday’s trading session on the back of expectations that plentiful supplies will buffer the market and outweigh the concerns of supply after unrest in the Middle East. Further, unfavorable economic data from the US continued with downside movement in the prices. Additionally, restart of the oil production in Libya which climbed to 925,000 barrels a day acted as a negative factor.

Also, weak market sentiments and strength in the DX exerted further downside pressure on the prices. Crude oil prices touched an intra-day low of $92.05/bbl and closed at $92.53/bbl in yesterday’s trade.

In the Indian markets, oil prices gained around 1.5 percent due to sharp depreciation in the Rupee.

L

LME Inventories

Copper

Lead

Zinc

Aluminium

Nickel

Current Stock

-1150

-50

-125

-3150

3174

ME Inventory 26-09-2014

NCDEX - WEEKLY NEWS LETTERS

CHANA

Chana futures witnessed covering of shorts on Thursday. Total volumes and OI declinedcompared to previous trading day.Stock position of Chana at NCDEX approved warehouses as on 24 September 2014 was 71,996MT.Decline in arrivals in the spot markets due to major mandis being closed supported the upside.However, mandis could re-open today and could prompt stockists and farmers to offload stocks.Chana delivered at NCDEX approved warehouses during September 2014 was 12,310 MT.

NCDEX Chana Indore – NCDEX Mumbai Yellow Peas Spot spread is trading at Rs. 312.75/100Kg.

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