Published on 26/05/2017 10:45:43 AM | Source: Angel Commodities Pvt Ltd

We expect MCX copper prices to trade lower today - Angel Commodities

Posted in Commodities Reports | #Commodity Tips #MCX #Angel Broking Pvt Ltd


Bullion

Gold

On Thursday, spot gold prices fell by 0.2 percent to close at $1255.4 per ounce as dollar steadied near 97.2 levels after outcome of the latest US Fed Minutes downsized the chances of rate hike in its June meeting although the Fed Funds futures says the probability of it happening at around 83 percent.

Minutes of the Federal Open Market Committee's early May meeting showed policymakers agreed to not tighten credit until they saw evidence that a recent economic slowdown was transitory.

Federal Funds Futures imply traders see an 83 percent chance of a U.S. rate hike in June, and a 46 percent chance of two more hikes by the year-end.

On the MCX, gold prices declined by 0.2 percent to close at Rs.28661 per 10 gms.

 

Silver

Spot silver prices fell by 0.4 percent to close at $17.1 per ounce in line with fall in gold prices.

On the MCX, silver prices declined by 0.1 percent to close at Rs.39802 per kg.

 

Outlook

We expect gold prices to trade sideways today as all the risk and uncertainties have faded for the time being while the minutes of the US Fed talked about slow pace of tightening in 2017 which will be tied to economic rebound.

On the MCX, gold prices are expected to trade sideways today, international markets are trading higher by 0.2 percent at $1258 per ounce.

 

Energy

Crude Oil

WTI oil prices plunged by 4.8 percent to close at $48.9 per barrel in the largest percent decline since May 4 as the much expected decision was taken in the meeting. The Organization of the Petroleum Exporting Countries and some non-OPEC producers agreed to extend a pledge to cut around 1.8 million barrels per day (bpd) until the end of the first quarter of 2018. The initial agreement would have expired in June this year.

This week, U.S. crude oil inventories fell for the seventh straight week as refiners processed a near-record amount of crude last week, the Energy Information Administration said on Wednesday, even as gasoline and distillate stocks also dipped.

On the MCX, oil prices declined by 4.5 percent to close at Rs.3178 per barrel.

 

EIA Inventory update

Crude inventories fell 4.4 million barrels in the week ended May 19. At 516.3 million barrels, U.S. crude inventories were the smallest since mid-February, a sign that OPEC's efforts to reduce world supply are starting to have an effect in the United States, the world's largest oil consumer. Gasoline stocks fell 787,000 barrels. Distillate stockpiles, which include diesel and heating oil, fell by 485,000 barrels.

 

Outlook

We expect oil prices to trade slightly lower today after a sharp fall in the previous session as US inventories remain a major cause of concern despite output cut extension by the OPEC. Also, US Prelim GDP data due tonight will be cautiously watched.

On the MCX, oil prices are expected are expected to trade higher today, international markets are trading lower by 0.7 percent to close at $51.73 per barrel.

 

Base Metals

LME base metals traded mixed yesterday as global investors were cautious ahead of OPEC and upcoming G7 meeting.

MCX base metals traded mixed in line with trends from international markets.

 

Copper

LME Copper prices traded higher by 0.7 percent at $5724/t as supply disruption concerns from one of the major mines is providing support. Freeport McMoRan Inc said on Thursday that mining and milling rates at its Grasberg mine in Papua, Indonesia have been affected by an extended strike, and a "large number" of about 4,000 absentee workers were deemed to have resigned.

However, Chinese demand woes remain a major matter of concern after investors after recent Moody’s downgrade and weak imports data. Moody’s downgraded Chinese sovereign debt rating for the first time since 1989, adding to slew of worries regarding growth of the mainland nation.

Also, the International Copper Study Group (ICSG) said in its latest monthly bulletin that the global world refined copper market showed a 93,000 tonnes surplus in February, compared with a 55,000 tonnes surplus in January. However, weaker DX and decline in LME stocks are supporting the metal.

However, sharp downside was restricted owing to decline in LME stocks for five days in a row.

MCX copper rose by 0.1 percent to close at Rs.371.7 per kg on Thursday.

 

Outlook

LME Copper prices are currently trading lower by 0.2 percent at $5717/t. Prices are expected to trade lower today as plunge in oil prices will hurt metals as well. Also, investors will be wary ahead of US Prelim GDP data due tonight.

We expect MCX copper prices to trade lower today.

 

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