Commodity Weekly Report By Ways2Capital 05 Jan 2014

INDORE, India - Jan. 7, 2015 - PRLog -- ✍ MCX - WEEKLY NEWS LETTERS

INTERNATIONAL NEWS

US Unemployment Claims rose to 298,000 in the last week. Chicago PMI fell to 58.3-mark in December from 60.8 levels in November. Pending Home Sales gained 0.8 percent in November as compared to a decline of 1.2 percent in October.

Activity in China's factory sector shrank for the first time in seven months in December, a private survey showed on Wednesday, highlighting the urgency behind a series of surprise easing moves by Beijing in the past two months.

Crude inventories fell by 1.8 million barrels in the last week, compared with analysts' expectations for an decrease of 67,000 barrels. Gasoline stocks rose by 3.0 million barrels, compared with analysts' expectations in a Reuters poll for a gain of 2.1 million barrels. Distillate stockpiles, which include diesel and heating oil, rose by 1.9 million barrels, versus expectations for a 1.5 million barrel increase, the EIA data showed.

European Central Bank President Mario Draghi said the risk of the central bank not fulfilling its mandate of preserving price stability was higher now than half a year ago, and reiterated its readiness to act early this year should it become necessary.

Major global markets remain closed yesterday on New Year’s Eve.

LME Copper stocks jumped by a whopping 2.8 percent on Tuesday.

US Unemployment Claims rose to 298,000 in the last week.

Selling of the greenback by exporters supports Indian Rupee

The US Dollar Index (DX) traded higher by 0.4 percent on Wednesday owing to rise in risk aversion in the market sentiments that led to rise in demand for the low yielding currency. However, mixed economic data restricted sharp upside. The currency touched an intraday high of 90.67 and closed at 90.65 on Wednesday.

PRECIOUS METALS

Spot silver prices declined by 3.7 percent and closed at $15.7/oz. The fall was in tandem with falling gold prices. Strength in the dollar index coupled with weakness in the base metals pack exerted downside pressure on prices.

On the MCX, silver prices gained by 3.65 percent on Thursday and closed at Rs.36210/10 gms.

Gold fell 1.5 percent on pressure from weak oil prices and gains in the U.S. dollar on Wednesday, and was poised to end 2014 down a slight 2 percent after falling below $1,200 an ounce.

The impact of a stronger dollar was partially offset by demand from investors worried about tensions in Russia and political uncertainty in Greece. Bullion was on track for a small fall this year after a turbulent 2013, when prices fell by a third following 12 years of gains.

Gold's main driver in 2014 has been a buoyant dollar, which was poised to post its biggest yearly gain since 2005, and anticipated U.S. interest rate hikes may strengthen the greenback's appeal in the coming year. Higher rates weigh on non-interest-bearing bullion.

BASE METAL

Copper was set to end 2014 with a loss of nearly 15 percent, its worst annual decline in three years, on concerns that a supply surplus will hit the market next year just as Chinese economic growth shifts down another gear.

Losses in copper, the most widely followed metal, were set to be exceeded only by lead - a market that was in surplus in the year to September - while nickel was poised to be the best performing metal with gains of 8 percent for the year thanks to Indonesia's ore export ban.

Copper prices ended 2014 with a loss of 14 percent, their biggest annual decline in three years, on concerns that a supply surplus will hit the market next year just as Chinese economic growth shifts down another gear. Losses in copper, the most widely followed metal, were matched by tin and exceeded only by lead - a market that was in surplus in the year to September - while nickel was the best-performing metal thanks to Indonesia's ore export ban. Yearend adjustments to market positions helped copper bounce off 4-1/2-year lows of $6,230 a tonne earlier this week, but it resumed its decline on Wednesday, ending down 0.41 percent on the day at $6,299 a tonne.

Weighing on the metal this year, the global copper market is expected to record a surplus of about 390,000 tonnes in 2015, according to an industry group. That would follow five straight years of deficit. Data on Wednesday showed activity in China's factory sector shrank for the first time in seven months in December, highlighting the urgency behind a series of surprise easing moves by Beijing in the past two months.

ENERGY

Oil prices fell on Wednesday to a 5-1/2-year low and ended with their second-biggest annual decline ever, down by half since June under pressure from a global glut of crude.

Just before the close, Brent and U.S. oil futures bounced off session lows. But prices still settled at their lowest since May 2009. Weekly U.S. data showed crude oil stockpiles fell more than expected, but inventories at the oil hub at Cushing, Oklahoma, grew, keeping prices depressed.

Oil prices have collapsed this year as the Organization of the Petroleum Exporting Countries opted to maintain the same level of output despite a global glut caused by expanding U.S. shale output and diminished demand growth from China.

U.S. crude closed with its second-largest annual decline on record. The biggest came in 2008, when prices collapsed in the wake of the financial crisis. The last round of OPEC output cuts eventually brought them off lows near $30 a barrel. In contrast, OPEC at a Nov. 27 meeting this year decided against cutting output. Despite its own forecasts of a growing surplus, the group opted to defend its market share against shale oil and other rival supply sources. Turmoil in Libya dented OPEC supply in December to a six-month low, a Reuters survey showed, although forecasts still point to a glut.

U.S. natural gas prices ended the year down more than 30 percent for their worst performance since 2011 after unseasonably warm weather raised questions on whether gas in storage was excessive for the heating required in coming months. While weather forecasts from this week onward have turned cold, price rebounds have been restrained by worries about whether gas in storage was possibly higher than needed when cold weather peaks in January and February. Latest weekly consumption numbers for gas from the U.S. Energy Information Administration showed a draw of 26 billion cubic feet (bcf) for the Christmas week ended Dec. 26. A Reuters poll of analysts had predicted a 38-bcf draw.


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