Commodity Research Report Ways2Capital 24 August 2015 Indore

Aug. 24, 2015 - PRLog -- INTERNATIONAL NEWS

✍ Gold falls by 0.2% on global cues

Gold prices  fell by Rs 50 to Rs 25,958 per 10 grams in futures trade on Wednesday  amid a weak global trend.

At Multi Commodity Exchange, gold for October contacts fell by Rs 50, or 0.19%, to Rs 25,958 per 10 grams in a business turnover of 354 lots.

On similar lines, the precious metal for delivery in December was trading down by Rs 43, or 0.16%, to Rs 26,171 per 10 grams in 32 lots.

Fall in gold futures to a weak global trend as investors await the release of Federal Reserve minutes which may give further clues on the timing of an interest rate increase.

Globally, gold was little changed at $1,117.71 an ounce in Singapore today.

✍ Zinc falls by 0.2% on global cues

Zinc futures traded 0.21% lower at Rs 119.15 per kg on mondaty  as speculators trimmed positions, tracking a weak global trend.

Zinc for delivery in August declined by 25 paise, or 0.21%, to Rs 119.15 per kg at the Multi Commodity Exchange. It clocked business turnover of 417 lots.

Likewise, the metal for delivery in the September contracts softened by 15 paise, or 0.12%, to Rs 120 per kg in 12 lots.

Weakness in zinc at futures trade was mostly attributed to a weak trend in copper and other base metals in the global markets as investors await US manufacturing, inflation and housing data this week that may give more clues on the timing of a Federal Reserve rate rise.

✍ Base metals hit multi year low on Chinese demand concerns

Base metals hit multi-year lows on the London Metal Exchange (LME) due to heightening risk of a demand slowdown from China, the world’s largest producer and consumer. The recent devaluation of the Chinese yuan will make base metals’ costlier and poses a risk to their imports into China.

Copper slipped below the psychological barrier of $5,000 a tonne before recovering to settle at $5,007 on Wednesday. The metal had touched this level last in July 2009 following the crash in financial markets after the collapse of Lehman Brothers.

Metals are falling in anticipation of falling consumption and swelling supply as global producers have not announced any major output cuts despite incurring losses at prevailing prices. Oversupply of most base metals is likely, resulting in a further fall in prices.

China is the primary factor contributing to base metals fall. The last stimulus by the Chinese government pulled back markets. Then the  devaluation followed. More than China’s weakening economy, the devaluation of the yuan pressured metals.
Following copper, aluminium prices also fell to $1,522, their lowest level since June 2009. Aluminium has declined 17 per cent this year. Zinc and nickel also settled at $1,776 a tonne and $10,330 a tonne on the LME, their lowest levels since August 2012 and April 2009, respectively. While copper reported a 21 per cent decline, zinc and nickel have plunged 18 per cent and 31 per cent, respectively, in 2015.

Growing risk that copper prices would fall further because of a Chinese hard landing. Its baseline scenario was for China’s growth to slow to 6.8 per cent and copper consumption to ease to 4 per cent

✍ Copper up on positive global cues

Copper futures on Thursday rose by 50 paise to Rs 328.85 per kg on the back of pick up in spot demand and positive cues from overseas markets.

At the Multi Commodity Exchange, copper for delivery in August was trading higher 50 paise to Rs 328.85 per kg with a turnover of 1,402 lots.

Similarly, the metal for delivery in far-month November was up 45 paise to Rs 335.05 per kg with a trade volume of 20 lots.

Globally, copper for three-month delivery added as much as 0.5% to $5,018 a tonne on the London Metal Exchange (LME).

Analysts attributed the rise in copper at futures trade to a firming trend on the LME where it snapped a five-day decline as weaker-than-expected inflation figures from the US trimmed bets on a September interest rate increase and the dollar weakened.

Besides, pick-up in spot demand at domestic markets supported the upside, they said.

✍ Lead falls by 0.4% on weak global cues

Lead fell 0.45% to Rs 109.75 per kg in futures trade on Wednesday  after participants reduced exposure amid a weak trend overseas and sluggish domestic demand.

At Multi Commodity Exchange, lead for delivery in current month contract was trading 50 paise, or 0.45%, down at Rs 109.75 per kg in a business turnover of 949 lots.

Metal for delivery in September fell by a similar margin to trade at Rs 110.85 per kg in 42 lots.

Besides weak demand from battery-makers in the domestic spot market, weakness in base metals at the London Metal Exchange on concern that demand may falter in China as an equity rout resumed weighed on lead futures here.

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