Gold prices fell on Friday and posted the largest weekly loss of 2017 so far amid growing expectations that the Federal Reserve will raise interest rates later this month
Gold prices fell on Friday and posted the largest weekly loss of 2017 so far amid growing expectations that the Federal Reserve will raise interest rates later this month. Gold for April delivery settled down 0.52% at $ 1,225.5 on the Comex division of the New York Mercantile Exchange, having touched its lowest since February 15 at $ 1,222.9 earlier. Gold finished the week down 2.5%. Gold then ticked up 0.13% to $1234.5 in after-hours trade. Fed Chair Janet Yellen said Friday that a rate hike "would likely be appropriate" this month if the economy remains on track. The remarks cemented the view that the Fed will raise interest rates at its next meeting on March 14-15, following a series of hawkish comments by Fed Policymakers earlier in the week. Almost 80% of traders expect a rate hike at the Fed’s March meeting, compared to just over 60% on Wednesday, according to Investing.com’s Fed rate monitor tool. Higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise. Elsewhere in precious metals trading, silver was at $ 17.99 a troy ounce late Friday, and ended the week down 3.5%, closing the week lower for the first time in 2017. Copper was at $2.68 a pound and ended the week with a gain of just 0.26%. Platinum was up 0.67% at $1,000.6 late Friday to end the week down 2.95%. In the week ahead, markets will be looking ahead to Friday’s U.S. jobs report, which could seal the deal for a Fed rate hike later this month. Investors will also be looking to the outcome of Thursday’s European Central Bank meeting for fresh cues on the future direction of its stimulus program.
Gold fell 1 percent on Friday and was on track for its biggest weekly loss in 2017 as speculation grew that the U.S. Federal Reserve would press ahead with a rate increase this month. Fed Chair Janet Yellen said on Friday that the central bank is set to raise its benchmark interest rate later this month as long as economic data on jobs and inflation holds up. to Yellen's comments, the probability of a Fed move in March had already risen to nearly 80 percent, money markets indicated, after hawkish comments from New York Fed chief William Dudley and San Francisco Fed President John Williams. "If there has been a conscious effort (to raise expectations for a rate hike) I'm about to join it," Fed Vice Chairman Stanley Fischer told an economists' forum, when asked about comments by other Fed officials this past week that have boosted market odds of a March rate hike. gold XAU= was down 0.03 percent at $1,234.41 an ounce by 2:22 p.m. EST, after falling 1 percent to $1,222.51, the lowest since Feb. 15. U.S. gold futures GCv1 for April delivery settled down 0.5 percent at $ 1,226.50. Gold prices have retreated more than 2 percent after failing to decisively break through resistance at their 200-day moving on Monday. "The market has responded very clearly to the more aggressive stance by FOMC members regarding rate hikes in March," Mitsubishi analyst Jonathan Butler said. "It's fair to say that a rate hike in March is pretty much priced into gold." Gold is highly sensitive to rising U.S. interest rates as they increase the opportunity cost of holding non-yielding bullion, while boosting the dollar in which it is priced. The world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD , reported a second daily inflow on Thursday, of 1.8 tonnes, bringing the weekly rise to 4 tonnes. The dollar, however, took a breather after two days of gains on Friday. Other precious metals, however, were firm. Spot silver XAG= turned up 0.8 percent to $17.89 but was set to close the week lower for the first time in 2017. "True to form, physical demand has not driven silver prices, but political uncertainty has driven greater investor interest in silver," said Standard Chartered in a note. "The narrowing spread between platinum and palladium calls into question whether the substitution of platinum for palladium will slow or even reverse given some autocatalysts can make the switch on a 1:1 basis."
Gold fell 1 percent on Friday and was on track for its biggest weekly loss in 2017 as speculation grew that the U.S. Federal Reserve would press ahead with a rate increase this month. Fed Chair Janet Yellen said on Friday that the central bank is set to raise its benchmark interest rate later this month as long as economic data on jobs and inflation holds up. to Yellen's comments, the probability of a Fed move in March had already risen to nearly 80 percent, money markets indicated, after hawkish comments from New York Fed chief William Dudley and San Francisco Fed President John Williams. "If there has been a conscious effort I'm about to join it," Fed Vice Chairman Stanley Fischer told an economists' forum, when asked about comments by other Fed officials this past week that have boosted market odds of a March rate hike. gold XAU= was down 0.03 percent at $ 1,234.41 an ounce by 2:22 p.m. EST, after falling 1 percent to $ 1,222.51, the lowest since Feb. 15. U.S. gold futures GCv1 for April delivery settled down 0.5 percent at $ 1,226.50. Gold prices have retreated more than 2 percent after failing to decisively break through resistance at their 200-day moving on Monday. "The market has responded very clearly to the more aggressive stance by FOMC members regarding rate hikes in March," Mitsubishi analyst Jonathan Butler said. "It's fair to say that a rate hike in March is pretty much priced into gold." Gold is highly sensitive to rising U.S. interest rates as they increase the opportunity cost of holding non-yielding bullion, while boosting the dollar in which it is priced. The world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD , reported a second daily inflow on Thursday, of 1.8 tonnes, bringing the weekly rise to 4 tonnes. The dollar, however, took a breather after two days of gains on Friday. Other precious metals, however, were firm. Spot silver XAG= turned up 0.8 percent to $ 17.89 but was set to close the week lower for the first time in 2017. "True to form, physical demand has not driven silver prices, but political uncertainty has driven greater investor interest in silver," said Standard Chartered in a note. "The narrowing spread between platinum and palladium calls into question whether the substitution of platinum for palladium will slow or even reverse given some auto-catalysts can make the switch on a 1:1 basis."
Gold demand in Asia was tepid this week with investors delaying fresh purchases anticipating a further drop in local prices as the global spot market was pressured by expectations of a hike in interest rates by the U.S. Federal Reserve. Spot gold XAU= was on track for its first weekly decline in five, its worst since November, on growing expectations of a U.S. rate hike as early as this month.
Gold discounts in India, the world's second-largest consumer of the metal, expanded this week to their widest in two months. "Consumers are expecting prices could drop below 29,000 rupees. That's why they are delaying purchases," said Kumar Jain, vice president of the Mumbai Jewellers Association. In the local market gold futures MAUc1 were trading around 29,125 Indian rupees per 10 grams on Friday. Before starting to fall back, the prices had risen as much as nearly 9 percent from 26,862 rupees per 10 grams in December, the lowest level since February 2, 2016. Dealers in India were offering a discount of up to $ 3 an ounce this week from official domestic prices, the widest it has been since the last week of December. Last week, dealers were charging a premium of $1 an ounce. The domestic price in India includes a 10 percent import tax. "Wedding season demand has been moderating. It will revive again in April," said a Mumbai-based dealer with a private bank. Meanwhile, India's February gold imports surged to 50 tonnes, up 82 percent from a year ago, on pent-up jeweller demand and as retail consumers ramped up purchases for weddings, provisional data from consultancy GFMS showed. top consumer China, physical demand for gold has been stable, traders said, with premiums being quoted between $ 9-$12 an ounce over international spot prices XAU= , compared to the $7-$8 levels seen last week. "China's jewellery demand remains subdued but investment demand is still doing well. "Broadly across Asia, there has not been much of an appetite with many waiting for a further leg down in prices before entering the market,"
Premiums in Hong Kong were around 50 cents to $1.10, compared to the 90 cents to $1 levels last week. Prices in Japan were at a discount of 50 cents to $1, unchanged from a week ago."In Singapore, demand for the yellow metal has been going down with people wanting to put money into riskier investments like equities and even real estate.
Gold prices moved lower on Friday, as growing expectations for a March rate hike in the U.S. and a stronger U.S. dollar continued to weigh on the precious metal. On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were down 0.41% at $1,227.85, the lowest since February 15. The April contract ended Thursday’s session 1.37% lower at $ 1,232.90 an ounce.
Futures were likely to find support at $ 1,217.30, the low of February 15 and resistance at $ 1,247.60, Thursday’s high. The greenback remained broadly supported after a number of Federal Reserve officials this week expressed their support for a March rate hike. The dollar was also boosted after the U.S. Department of Labour said initial jobless claims declined by 19,000 to 223,000 in the week ending February 25 from the previous week’s total of 242,000. Analysts expected jobless claims to rise by 1,000 to 243,000 last week. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.13% at 102.03, not far from Thursday’s seven-week high of 102.27. A strong U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. More clues on interest rate hikes ahead of the central bank's March 14-15 meeting were expected on Friday, with speeches scheduled from both Fed Chair Janet Yellen and Vice Chair Stanley Fischer. Elsewhere in metals trading, silver futures for May delivery was little changed at $ 17.742 a troy ounce, while copper futures for May delivery were steady at $ 2.690 a pound.
Gold prices resumed losses from the prior session during European morning hours on Thursday, amid rising expectations that the Federal Reserve will raise interest rates later this month. Comex gold futures declined $ 3.55, or about 0.3%, to $ 1,246.45 a troy ounce by 3:10AM ET, after losing around $ 4 on Wednesday. Spot gold was down $ 4.00 to $ 1,245.60 per ounce. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was slightly higher at 101.86 in London morning trade. The index reached a seven-week high of 102.00 earlier. Treasury yields were little changed, with the U.S. 10-Year bond at around 2.467%, close to a two-week high, while the Fed-sensitive 2-Year yield hovered near a more than seven-year high of 1.308% touched on Wednesday. Fed Governor Lael Brainard said on Wednesday that an improving global economy and a solid U.S. recovery mean it will be "appropriate soon" for the U.S. central bank to raise interest rates. Her comments added an important voice to the chorus of officials this week signaling rates may rise as soon as mid-March. New York Fed President William Dudley said on Tuesday that the case for a rate hike has become "a lot more compelling" and San Francisco Fed President John Williams said a rate hike would be seriously considered at the March meeting and that he sees no reason to delay. More clues on interest rate hikes ahead of the central bank's March 14-15 meeting are expected to come Friday, when Fed Chair Janet Yellen speaks on monetary policy in Chicago. Vice Chair Stanley Fischer also speaks Friday. Investors raised their outlook on a faster pace of U.S. rate increases following the flurry of hawkish Fed comments this week. Futures traders are now pricing in around a 75% chance of a Fed hike in March, up from around 25% at the start of the week. Odds of a second rate hike in September currently stand at 63%, while a third hike in December is priced in at 53%, aligning market expectations with the Fed's current forecast for three rate hikes in 2017. The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced. Also on the Comex, silver futures for May delivery dipped 6.1 cents, or 0.3%, to $18.42 a troy ounce after reaching $18.51 on Wednesday, the highest since November 11. Meanwhile, platinum was down 0.2% to $1,017.55, while palladium shed 0.4% to $775.92 an ounce.
Gold gave back most of its losses on Wednesday as the dollar pared gains and bullion shrugged off earlier pressure from U.S. Federal Reserve officials' comments that raised expectations of an interest rate hike in March. New York Fed President William Dudley, one of the most influential U.S. central bankers, said the case for tightening monetary policy had become "a lot more compelling," while San Francisco Fed President John Williams said he saw "no need to delay" raising rates. gold XAU= was down 0.1 percent at $ 1,246.83 an ounce by 2:12 p.m. EST, heading for a third straight day of losses. The metal hit its highest since Nov. 11 at $1,263.80 on Feb. 27. U.S. gold futures GCcv1 settled down 0.3 percent at $ 1,250. The perceived probability of a March rate hike jumped to 67.5 percent from roughly 30 percent after the Fed officials' comments on Tuesday, according to Thomson Reuters data. "The initial reaction was a major sell-off. A lot of people are skeptical over how the percent changed drastically. "Now people are digesting the information and looking at some of the outside developments." Rising U.S. interest rates increase the opportunity cost of holding non-yielding gold, while boosting the dollar. Data on Wednesday showed U.S. consumer price inflation jumped 0.4 percent in January, the largest increase since February 2013, while consumer spending increased 0.2 percent. Chair Yellen will be giving a speech on Friday. If Yellen's remarks also point to a rate hike in the near future, this will weigh on the gold price. Expectations that President Donald Trump would give details on U.S. stimulus plans on Tuesday were largely disappointed, as he failed again to provide detail on tax reform and infrastructure spending. speech did, however, contrast with the harsher rhetoric investors have come to expect, tempting some into riskier assets and knocking gold's appeal as a safe haven. The dollar .DXY index climbed to a seven-week high but later pared losses. India's February gold imports surged more than 82 percent from a year ago as consumers ramped up purchases for weddings, provisional data from consultancy GFMS showed. silver XAG= rose 0.6 percent at $18.40 an ounce, platinum XPT= fell 1.1 percent at $1,012.25 and palladium XPD= gained 0.9 percent at $775.75.
Gold prices fell toward a one-week low during European morning hours on Wednesday, after an influential Federal Reserve policymaker jolted markets into higher expectations for a March U.S. interest rate hike. Comex gold futures declined $ 9.75, or about 0.8%, to $ 1,244.15 a troy ounce by 3:15AM ET , pulling further away from a three-and-a-half-month high of $ 1,264.90 reached earlier this week. Spot gold was down $ 4.50 to $ 1,243.80 per ounce. The metal hit its highest since November at $1,263.95 on Monday. New York Fed President William Dudley, among the most influential U.S. central bankers, said in an interview with CNN on Tuesday that the case for tightening monetary policy "has become a lot more compelling" and that he sees a rate hike in the "relatively near future". Investors raised their outlook on a faster pace of U.S. rate increases following his comments. Fed fund futures priced in about a 70% chance of a rate hike in March., up from around 25% at the start of the week. Odds of a May increase was seen at 74%, while June odds were at around 85%. More clues on interest rate hikes ahead of the central bank's March 14-15 meeting are expected to come Wednesday. Comments from Fed Chair Janet Yellen at the end of the week will also be in focus. The Fed chief is scheduled to speak on Friday. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up around 0.4% at 101.75 in London morning trade, its strongest level in almost two months. Treasury yields shot up, with the U.S. 10-Year bond at around 2.410%, up from 2.358% on Tuesday. The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced. Meanwhile, markets digested a speech by U.S. President Donald Trump to Congress overnight, which offered little details on his plans for infrastructure spending and tax reforms. The president vowed to pursue massive tax relief for the middle class but stopped short of giving details.
India's February gold imports surged to 50 tonnes, up more than 82 percent from a year ago, on pent-up jeweller demand and as retail consumers ramped up purchases for weddings, provisional data from consultancy GFMS showed on Wednesday. The rise in imports by the world's second-biggest consumer of the precious metal will support global prices XAU= that are trading near their highest level in 3-1/2 months, but could widen the South Asian country's trade deficit. "Pent-up demand on the ease of the cash crunch and wedding related demand lifted imports in February," said Sudheesh Nambiath, a senior analyst at GFMS, a division of Thomson Reuters.
In November, Prime Minister Narendra Modi scrapped 500- and 1,000-rupee banknotes, notes that were 86 percent of the value of cash in circulation, as part of a crackdown on corruption, tax evasion and militant financing. gold imports had fallen to 27.4 tonnes in February 2016 as buyers postponed purchases in anticipation of a reduction in the import duty in the budget at the time. February, retail demand improved due to the wedding season and as cash supplies became normal, said Bachhraj Bamalwa, a jeweller based in the eastern Indian city of Kolkata. But imports in March could fall as a recent rally in prices has started deterring buyers. "Consumers are struggling to adjust with higher prices. They are postponing purchases expecting a correction in prices. In the local market, gold futures MAUc1 were trading at 29,380 rupees per 10 grams on Wednesday, up more than 9 percent since falling to 26,862 rupees in December 2016, its lowest in 10 months. India's gold imports in 2016 had fallen nearly 44 percent versus 2015 to 510.4 tonnes, the lowest level in 13 years. "Last year was an unusual year. This year consumption and imports will rise as jewellery demand has been recovering," said Bamalwa.
Gold could retreat back to $ 1,200 an ounce on technical and fundamental considerations. The precious metal has rallied from its December low of $ 1,122.75 but there seems to be limited further upside potential. RSI Oscillator is currently pointing to overbought levels, while prices are close to a reversal point at the 61.8% Fibonacci level at $ 1,280.10. That level also coincides with the possible end of the potential ABCD pattern. Gold also faces mounting pressure for a rise in short-term interest rates. FOMC members of late have been talking up the rationale for a March interest rate hike. The scenario is building for gold to form new lows well below the $1,046 mark in the medium term. In the short run, gold could move toward the $ 1,280 mark before a breakout failure sends it sharply lower toward $1,200 in a matter of weeks.
Gold prices hit three-and-a-half month highs on Friday as hopes for rapid tax reforms under the Trump administration faded, bolstering demand for the precious metal. Gold for April delivery settled up 0.53% at $ 1,258.05 on the Comex division of the New York Mercantile Exchange, having touched its highest since November 11 at $1,258.8 earlier. Gold finished the week with gains of 1.56%, notching up its fourth straight weekly increase. On Thursday U.S. Treasury Secretary Steven Mnuchin said he wants to see "very significant" tax reform passed before Congress' August recess, but indicated that much work was still needed. He also suggested that any steps the Trump administration takes on policy would probably have a limited impact this year. The remarks dampened expectations for policy changes that investors had anticipated would spur inflation and drive up U.S. interest rates. Elsewhere in precious metals trading, silver was at $18.40 a troy ounce late Friday, and ended the week up 2.24%, in its ninth straight weekly gain. Copper was at $2.696 a pound and ended the week down 0.92%, its second straight weekly drop as concerns over the demand outlook weighed. Platinum ended up 1.89% to $1,031.05 late Friday, hitting its highest since February 9. In the week ahead, global financial markets will focus on U.S. President Donald Trump's address to Congress on Tuesday for further details on his promises of tax reform, deregulation and infrastructure spending. This week is also peppered with a handful of Fed appearances, most importantly Fed Chair Janet Yellen on Friday. Investors will also be watching a revised reading of fourth-quarter U.S. growth to gauge the strength of the economy. Private sector survey data from the UK and euro zone inflation data will also be in focus.Ahead of the coming week, The list of these and other significant events likely to affect the markets.
UPCOMING EVENTS OF MARKET
Monday, March 6
Australia is to release data on retail sales.
The U.S. is to publish figures on factory orders.
Minneapolis Fed President Neel Kashkari is to speak.
Tuesday, March 7
The Reserve Bank of Australia is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.
Germany is to release data on factory orders.
The U.K. is to release industry data on house price inflation.
The U.S. and Canada are to publish trade figures.
Wednesday, March 8
Japan is to publish revised data on fourth quarter economic growth.
China is to release data on the trade balance.
In the U.K., Chancellor Philip Hammond is to outline the government’s budget for the year.
The U.S. is to release the ADP non-farm payroll report.
Canada is to publish data on building permits.
Thursday, March 9
China is to release data on consumer and producer price inflation.
The ECB is to announce its latest monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.
Canada is to report on new house price inflation.
The U.S. is to publish data on unemployment claims and import prices.
Friday, March 10
The UK is to release reports on manufacturing production and the trade balance.
Canada is to publish its monthly employment report.
The U.S. is to round up the week with the closely watched report on non-farm payrolls.
BASE METAL’S OUTLOOK :
BASE METAL GUIDE -
Trading Ideas :
Nickel trading range for the day is 721.6-744.
Nickel prices gained as support seen after update that The Philippines could consider banning exports of unprocessed minerals such as nickel.
Prices remained supported on the potential for supply disruption from the world's top nickel ore exporter.
Indonesia’s government is now discussing on nickel ore export quotas, according to sources
Zinc trading range for the day is 183-189.4.
Zinc prices settled flat as pressure seen tracking LME prices slipped 0.2 percent to $2,775 a tonne as the dollar largely retained recent gains.
Combined zinc inventories in Shanghai, Tianjin and Guangdong added 1,100 to 299,100 tonnes this past week, data showed. Global zinc stocks across the London Metal Exchange, China and the United States are now at their smallest since 2009 on a seasonal basis.
Copper trading range for the day is 394.6-401.4.
Copper prices traded in range and ended with small gains amid concerns over a strike at the world's largest copper mine in Chile.
Chile expects February growth, copper output hit by miners strike
1 . London zinc prices have nearly doubled over the past 13 months and are closing in on nine-year highs, but signs of tightening in the global market for refined zinc means the rally may have further to run. Zinc bulls pushed prices higher after the closure of several giant zinc mines last year led to a steep drop in global ore supply, setting the stage for a shortage of the metal used to rust-proof steel. There are now signs that shortage is materialising, with global stocks shrinking and prices for spot metal rising, just as post-holiday demand picks up in China and a strike at North America's second-largest zinc plant further cuts supply.
2. Zinc futures traded 0.70 per cent lower at Rs 184.55 per kg on Monday after speculators trimmed positions, tracking a weak trend at the domestic spot market. In futures trading at Multi Commodity Exchange, zinc for delivery in current month declined by Rs 1.30, or 0.70 per cent, to Rs 184.55 per kg. It clocked a business turnover of 669 lots. On similar lines, the metal for delivery in April softened by Rs 1.10, or 0.59 per cent, to Rs 185.15 per kg in 53 lots. Market analysts said weakness in zinc futures trade was mostly due to a falling trend in select base metals owing to muted demand from consuming industries.
3.Zinc prices drifted lower by 0.37 per cent to Rs 176.35 per kg in futures trade as traders engaged in trimming their positions, taking negative cues from spot market on fall in demand from consuming industries. At the Multi Commodity Exchange, zinc for delivery in January declined by 65 paise, or 0.37 per cent, to Rs 176.35 per kg in a business turnover of 477 lots. In a similar fashion, the metal for delivery in February shed 40 paise, or 0.23 per cent, to Rs 176.85 per kg in 2 lots. Market analysts said offloading of positions by participants owing to slackened demand from consuming industries in the spot market, kept zinc prices down at futures trade.
1. Amid sluggish domestic demand and profit-booking by speculators, lead prices softened 0.83 per cent to Rs 149.30 per kg in futures trade. At Multi Commodity Exchange, lead for delivery in March month moved down by Rs 1.25, or 0.83 per cent to Rs 149.30 per kg in business turnover of 434 lots. Likewise, the metal for delivery in April contracts shed 95 paise, or 0.63 per cent to Rs 150 per kg in 36 lots. Analysts said besides sluggish demand from battery makers in the spot market, trimming of positions by traders to book profits at current levels, led to the fall in lead prices at futures trade.
2. Lead futures rose by 1.21 per cent to Rs 163.25 per kg today on the back of strong demand in spot market and a firming trend overseas. At Multi Commodity Exchange, lead for delivery this month traded higher by Rs 1.95, or 1.21 per cent, at Rs 163.25 per kg with a turnover of 407 lots. Metal for delivery in far-month March also gained Rs 1.75, or 1.09 per cent to Rs 162.95 per kg in 11 lots. Marketmen said pick-up in domestic demand, particularly from battery-makers, and a firming trend in base metal pack at the London Metal Exchange, supported the upside in lead futures here.
1. Copper futures traded 0.35 per cent lower at Rs 397.10 per kg as speculators offloaded bets. Furthermore, subdued demand at domestic spot market pushed down metal prices. At the Multi Commodity Exchange, copper for delivery in April shed Rs 1.40, or 0.35 per cent, to Rs 397.10 per kg, in a business turnover of 831 lots. Also, metal for delivery in far-month June lost similar ground to trade at Rs 400.70 per kg in 56 lots. Analysts attributed the fall to offloading of positions by participants amid muted demand at the domestic spot markets. They said, however, gains in metal at the London Metal Exchange , capped the losses. Meanwhile, copper gained 0.1 per cent, after two days of losses at the LME.
2. Copper futures rose 1.13 per cent to Rs 417.75 per kg as participants enlarged positions, taking positive cues from overseas markets and a pickup in spot demand. At the Multi Commodity Exchange, copper for delivery in current month was trading higher by Rs 4.60, or 1.13 per cent, to Rs 412.75 per kg, with a turnover of 1,541 lots. Similarly, the metal for delivery in far-month April contract was up by Rs 4.50, or 1.09 per cent, at Rs 416.75 per kg, with a trade volume of 57 lots. Market analysts attributed the rise in copper futures trade to a firming trend in metal at the London Metal Exchange , extending Friday's jump that was the largest since 2013. Globally, copper for delivery in three-month rose 1.1 per cent at the LME.
Nickel prices were up by 0.56 per cent to Rs 720.50 per kg in futures trade today on pick up in demand from consuming industries in the spot market amid a firm global trend. Nickel for delivery in March moved up by Rs 4, or 0.56 per cent, to Rs 720.50 per kg in business turnover of 38 lots at the Multi Commodity Exchange. Also, the metal for delivery in current month gained Rs 3.90, or 0.55 per cent to Rs 714.70 per kg in 853 lots. Market analysts said besides pick-up in demand from consuming industries, particularly alloy-makers, a firm trend in base metals in the global market, led to rise in nickel prices at futures trade here.
NCDEX - WEEKLY MARKET REVIEW
? CRUDE PALM OIL
Crude palm oil prices were up by 1.11 per cent to Rs 545.60 per 10 kg in futures trade today as speculators indulged in enlarging positions, driven by a firm demand at the spot market. Besides, a firming trend in overseas markets supported the uptrend. At the Multi Commodity Exchange, crude palm oil for delivery this month rose by Rs 6, or 1.11 per cent, to Rs 545.60 per 10 kg, in a business turnover of 436 lots. Similarly, the oil for delivery in far-month April went up by Rs 5.70, or 1.07 per cent, to Rs 537.40 per 10 kg in 155 lots. Analysts said widening of positions by participants amid pick up in demand in the spot market against tight stocks position on restricted supplies from producing regions mainly kept crude palm oil prices higher at futures trade.
? MENTHA OIL
Mentha oil prices were up 0.61 per cent to Rs 1,048.40 per kg in futures market today as participants widened their holdings on the back of rising demand from consuming industries at the spot market. Tight stocks position following restricted arrivals from major producing belts of Chandausi in Uttar Pradesh also extended support to mentha oil prices uptrend. At the Multi Commodity Exchange, mentha oil for delivery this month rose by Rs 6.40, or 0.61 per cent, to Rs 1,048.40 per kg, clocking a business volume of 177 lots. The oil for April delivery traded higher by Rs 5.90, or 0.57 per cent, to Rs 1,049.70 per kg, with a trading volume of 23 lots. Analysts said fresh positions built up by speculators, driven by rising demand from consuming industries in the spot markets against restricted supplies from Chandausi led to the rise in mentha oil prices in futures trade.
Turmeric prices moved down by 1.64 per cent to Rs 6,726 per quintal in futures trade today as participants reduced their exposure amid easing demand at domestic spot market against adequate stocks position. At the National Commodity and Derivatives Exchange, turmeric for delivery in April fell by Rs 112, or 1.64 per cent, to Rs 6,726 per quintal, with an open interest of 14,145 lots. Similarly, the spice for delivery in May fell by Rs 88, or 1.29 per cent, to Rs 6,744 per quintal in 2,965 lots. Market analysts said offloading of positions by traders, driven by fall in demand in the spot market against ample stocks position on increased supplies from growing regions, mainly put pressure on turmeric prices at futures trade.
? MUSTARD SEED
National Commodities and Derivative Exchange mustard April delivery futures jumped more than 1.55% on Tuesday, due to short-covering rally sparked for the near month contract (April) as market participants rolled over to May from the lowest levels not seen since April 2015. NCDEX April Mustard jumped to the highest levels for the month today even as the market is expecting a record-large domestic crop this season. The agriculture ministry has set a production estimate of 79.12 lakh tonnes in the 2016-17 (Jul-Jun) crop year, up from 68 lt estimated production last year in the second advance estimates for 2016/17 published in Feb 2015, "
The mustard prices on NCDEX jumped for second consecutive session from Rs. 3750 a quintal, which is close to the minimum support prices declared by the government for 2016/17 crop, to trade near Rs. 3,850 levels today. The sudden surge in prices of RMseed / Mustard sees is mainly due to short covering in near month contract (April delivery ) by the market participants and carry forward their positions to far month contract (May delivery). The Open Interest (OI) decline for near month (April) to 42,340 lots today (28-Feb-17) compared to 49,610 lots on Monday (27-Feb-17). However, OI increases for May delivery contract from 14,600 tonnes to 16,320 tonnes thus see a fresh buying in the far month contract.
1. Madhya Pradesh is expecting to emerge as the second largest wheat producing state in India with a target of a record 20 million tonnes this year. Madhya Pradesh is known for its high-protein Sharbati wheat variety and others like Durum, which are in demand for making pasta. The state discontinued offering Rs 150 per kg bonus in 2014 following a central government order. Though the opposition Congress contests claims of the government on wheat procurement, the yield is increasing since 2007-2008. In 2007, Madhya Pradesh’s wheat yield was 1,643 kg per hectare. “It is now expected to reach 3,271 kg per hectare,” said ML Mina, director, state farmers welfare and agriculture development. Farmers have provided more acreage to wheat. Sharbati, Durum and Lok-I fetch good returns. We will be the second largest wheat producing state since weather conditions are favourable this year,” he added. Punjab and Uttar Pradesh are the top two wheat producing states at present. Madhya Pradesh has witnessed drought, frost, unseasonal rain and hailstorm during the past several seasons, yet farmers have managed to maintain productivity. “Farm mechanisation plays a key role. Despite odd weather, farmers are continuing with wheat,” he said.
2. The Centre has asked Madhya Pradesh, Rajasthan and Gujarat governments to soon start wheat procurement as the new crop has started arriving in the local markets. The Food Corporation of India and state government's agencies start wheat procurement from April.
The country is all set to harvest a record production of 96.64 million tonnes in 2016-17 crop year (July-June) as against 92.29 million tonnes in the previous year. Enthused by estimates of bumper crop, FCI has increased the target of wheat procurement to 33 million tonnes for the 2017-18 marketing year from 23 million tonnes purchased during the current year. "Wheat harvesting has begun. Early variety crop has started arriving in the markets of Gujarat, MP and Rajasthan. We have asked the states to prepone procurement operations to ensure farmers get the minimum support price," a senior food ministry official told PTI.
3. Non-fumigated wheat that could harm people eating it could be entering India despite government rules to not allow such imports. The rules will be made tighter from March 31, but some importers have devised ways to bring in such wheat by producing fake fumigation documents. Wheat imports to India must be fumigated with methyl bromide at the port of origin. If this is not done, consignments are fumigated at Indian ports. From March 31, fumigation will have to be done only at the port of origin.
As cereal prices slump in India on estimates of bumper production, the threat of adverse climatic conditions has pushed up their prices in global markets. Prices of cereals, led by wheat, have reported up to 11 per cent declines in local markets since January. The government’s second advanced estimates a fortnight ago put India’s grain output at a record 271.98 million tonnes in 2016-17, up from 251.57 million tonnes in 2015-16. According to the National Commodity and Derivatives Exchange, wheat prices in the Rajkot spot market have declined by 11.03 per cent since January to Rs 1,600 a quintal and barley prices in Delhi declined by 5.71 per cent to Rs 1,858.35 a quintal. The Food and Agricultural Organisation in its latest report forecast a 1.8 per cent decline in the global production of wheat at 744.5 million tonnes in 2017.
? SUGAR -
As the sugar season in some of the western and southern states like Maharashtra, Karnataka is coming to an early end, the Indian Sugar Mills Association said on Thursday, “Sugar stocks in the mills of north India, especially in Uttar Pradesh , are higher because of good production compared to last year.” Considering that 156 mills are still operating (crushing) in the northern part and are likely to continue till April, it is expected, a higher quantity of sugar will be produced from this region than the drought-affected states in the west and south. This will boost total stocks. ISMA refused to furnish data of inventories but, said stock was notably low in the western and southern mills. According to Isma, a total of 107 mills are continuing their operations in UP.
Till end of February, mills have produced 6.24 million tonnes of sugar, 17 per cent higher in comparison to last year’s production of 5.35 MT. This year UP has emerged as the top sugar producing state in the country. Maharashtra, with its 17 mills in operation of the 153, may end at a distant second. In Karnataka, only one sugar mill is functional. The state had produced 2.50 mt compared to 3.61 mt last year.
Prices of onions have collapsed on the back of two consecutive bumper production years, proving once again that when farmers grow more, they get less. According to government data, the wholesale modal onion prices at Lasalgaon in Maharashtra, the biggest trading centre for onion in India, dropped between 30-40 per cent after the November note ban. The cost of production of onion is around Rs 800-900 per quintal, while prices are hovering around Rs 500 per quintal across major wholesale markets. Onion prices have come down substantially at the retail level as well, during the past one year. Around January-February last year, onion prices were around Rs 20-22 per kg, against Rs 12-14 per kg at present.The prices are expected to remain low, as fresh arrivals of the crop continue till May 2017. Onion harvest generally takes place between September and May, divided into three seasons-pre-Kharif, Kharif and Rabi.
? PULSES -
Storage issues might resurface at Food Corporation of India after two years of low grain procurement as the target for rabi wheat purchase this year has been increased sharply. The food ministry in a statement on February 15 set a 33 million tonne wheat procurement target for the season beginning April, a jump from the previous year’s procurement of 22.96 million tonnes. While the target is for the entire year, much of the procurement happens between April and June.
Government agencies, including FCI and state government warehousing companies, have procured 43.71 million tonnes of paddy by February 15. Also, FCI in association with the Small Farmers’ Agribusiness Consortium and National Agricultural Cooperative Marketing Federation of India has for the first time procured 1 million tonnes of pulses till February 15.
? PALM OIL
The following factors are likely to influence Malaysian palm oil futures and other vegetable oil markets.
Malaysian palm oil futures rose slightly late on Friday, charting a fourth consecutive session of gains on forecasts that February inventory levels could remain flat.
U.S. corn, soybean and wheat futures all closed modestly higher on Friday, recovering from early weakness on a mild round of technical buying.
Oil prices surged on Friday, as a weaker dollar encouraged buying but investors remained cautious after Russian production figures showed weak compliance with a global deal to cut output.
Wall Street stock indexes and the U.S. dollar both posted gains for the week on Friday after Federal Reserve Chair Janet Yellen confirmed market expectations for an interest rate rise in March but profit taking saw equities and the greenback slip for the day.
( March 4 - 2017 )
Robusta coffee futures on ICE fell on Friday, pressured by physical selling in top producer Vietnam, while cocoa rebounded further above multiyear lows on chart-based buying and sugar prices eased.
May robusta LRCc2 settled down $21, or 0.95 percent, at $2,194 per tonne, after a sharp rally lifted prices 3.1 percent in the previous session.
Dealers said Thursday's gains had triggered origin selling in Vietnam as producers sought to lock in attractive prices.
"That has put a temporary cap on the market," one dealer said. "Underlying fundamentals are still positive, but short term, I think it will have to eat through a little bit of selling."
May arabica KCc2 settled down 1.05 cents, or 0.7 percent, at $1.433 per lb.
May New York cocoa CCc2 settled up $27, or 1.4 percent, at $1,955 per tonne. Total New York cocoa open interest rose to a record 286,094 lots on Thursday, climbing for the eighth straight session, ICE data showed.
Prices extended the prior session's gains, when futures tapped a 9-1/2-year low before rallying to close higher, creating a technical buy signal, traders said.
The market, however, has not yet appeared to have found a bottom, traders said.
Cocoa fundamentals remained bearish with plentiful supplies from top grower Ivory Coast still in focus.
May London cocoa LCCc2 settled up 28 pounds, or 1.8 percent, at 1,605 pounds per tonne.
May raw sugar SBc1 settled up 0.18 cent, or 0.9 percent, at 19.66 cents per lb.
Chart-based support came from a so called triple bottom at 19.1 cents, the session low of the past three sessions.
While the market digested Tuesday's news that the March delivery was unexpectedly the biggest for that contract, with traders seeing Wilmar International Ltd as the sole buyer, some viewed it as bullish.
One would assume the delivery has accounted for a significant amount of currently available stocks, already tight globally, and over the past few days we have seen reluctance by the trade to push the market down to and through 19 cents.
However, a modest premium on the front month indicated the market was betting on sufficient Brazilian production, the Commonwealth Bank of Australia said in a note.
"Chatter continues to discuss a dearth of sugar in the second quarter," analyst Tobin Gorey wrote. "The market's pricing does not share that worry for now."
May white sugar LSUc1 settled up $4.20, or 0.8 percent, at $543.60 per tonne.
May raw sugar SBc1 settled down 0.14 cent, or 0.7 percent, at 19.52 cents per lb.
Dealers said the focus was on India, where there are signs that the world's top consumer will import less sugar than expected to offset tightening supplies and rising domestic prices.
Some 107 sugar mills were still crushing cane at the end of February in Uttar Pradesh, a major producing region, with output up 17 percent, the Indian Sugar Mills Association (ISMA) said on Thursday.
May white sugar LSUc1 settled down $ 1.70, or 0.3 percent, at $ 541.90 per tonne.
The premium for August white sugar over the July raws contract LSU-SB2=R rose above $117, its highest since 2013.
"The premium is reflecting the increasing belief that whites will have to come into India at one point," said one dealer.
( March 3 - 2017 )
Robusta coffee futures fell on Friday on physical selling in top producer Vietnam, while sugar eased on signs that India may need to import less sugar than expected.
May robusta LRCc2 fell $17 or 0.77 percent to $2,198 per tonne by 1220 GMT, after a sharp rally lifted prices 3.1 percent in the previous session.
Dealers said Thursday's gains had triggered origin selling in Vietnam, as producers sought to lock in attractive prices.
"That's put a temporary cap on the market," one dealer said. "Underlying fundamentals are still positive but, short-term, I think it will have to eat through a little bit of selling."
May arabica KCc2 dipped 0.15 cents, or 0.10 percent, to $1.442 per lb.
May raw sugar SBc1 fell 0.16 cents or 0.81 percent to 19.50 cents a lb.
Dealers said focus was on India, where there are signs that the world's top consumer may need to import less sugar to offset tightening supplies and climbing domestic prices.
Some 107 sugar mills were still crushing cane at the end of February in Uttar Pradesh, a major producing region, with output up 17 percent, the Indian Sugar Mills Association said on Thursday.
May white sugar LSUc1 also fell $2.60 or 0.48 percent to$541.00 per tonne.
However, the premium for August white sugar over the July raws contract rose to above $105, its highest since November 2016.
"The premium is reflecting the increasing belief that whites will have to come into India at one point," said one dealer.
May New York cocoa CCc2 rose $23 or 1.19 percent to $1,951 a tonne, gaining further ground after a volatile session on Thursday where prices rebounded sharply after touching 9-1/2 year lows. Futures continued to be driven mainly by technicals, with dealers characterising the gains as a correction.
Cocoa fundamentals, however, remained bearish with plentiful supplies from top grower Ivory Coast still in focus.
May London cocoa LCCc2 also rose, gaining 31 pounds or 1.97 percent to 1,608 pounds a tonne.
Futures had rebounded from 3-1/2 year lows in the previous session.
A weaker pound added support to London prices, as sterling hit a 7-week low on weak UK economic data.
Castor oil in non-edible section today strengthened in Vidarbha region of Western Maharashtra on increased offtake by soap industries amid healthy rise in producing belts. Weak production estimates also fuelled prices. Trading activity in other edible oils reported weak as no trader was in mood for any commitment because of notable hike in international edible oils, sources said Friday.
VIDARBHA MARKETS OILS
Soymeal prices today recovered here on good demand from South-based traders amid
WEAK SUPPLY FROM LOCAL CRUSHING PLANTS.
Soyabean prices moved down in Nagpur Agriculture Produce Marketing
Committee on poor buying support from local crushing plants amid high
moisture content arrival. Fresh fall in Madhya Pradesh soyabean prices and release
of stock from stockists also pushed down prices.
About 800 soyabean bags reported for auctions here, according to sources.
Indian soyoil futures rose on Thursday aided by higher demand to buy the contract at a significant discount. As of 1304 GMT, March soyoil futures NSOH7 were up 0.4 percent at 668 Indian rupees $10.01 per 10 kg on the National Commodity & Derivatives Exchange Ltd. The most-actively traded Indian soybean futures NSBH7 dropped 0.3 percent to 2,915 rupees per 100 kg. The April rapeseed contract NRSJ7 rose 0.8 percent to 3,915 rupees per 100 kg, while the March corn futures NMZFH7 were down 0.2 percent at 1,402 rupees per 100 kg.
Indian soyoil futures fell on Wednesday despite a rise in the prices of soyoil contract on the Chicago Board of Trade and Malaysian Palm. Malaysian palm oil futures jumped to a one-week high on Wednesday, supported by strong gains in Chicago Board of Trade soyoil. of 1224 GMT, March soyoil futures NSOH7 were down 1 percent at 668.50 rupees per 10 kg on the National Commodity & Derivatives Exchange Ltd. The most-actively traded Indian soybean futures NSBH7 fell 0.5 percent to 2,922 rupees per 100 kg. "Soyoil and soybean contracts are down mainly due to profit-booking. The April rapeseed contract NRSJ7 rose 1 percent to 3,885 rupees per 100 kg, while the March corn futures NMZFH7 were largely flat at 1,403 rupees per 100 kg.
Soyabean oil prices geared up in Vidarbha region of Western Maharashtra today on increased offtake by vanaspati millers amid a firming global trend. Buying activity reported high as palm oil prices in Malaysia, the second largest producer, quoted strong. Healthy hike on NCDEX, Upward trend in American soya digam prices and notable rise in Madhya Pradesh edible oil also boosted sentiment, sources said Wednesday.
Soymeal prices ruled recovered strongly here on renewed demand from South-based
Traders amid thin supply from local crushing plants. Fresh rise in overseas soymeal
Soyabean prices firmed up again in Nagpur Agriculture Produce Marketing
Committee on good buying support from local crushing plants amid weak supply
from producing regions. Notable hike in Madhya Pradesh soyabean and upward trend on
NCDEX also helped to push up prices.
About 400 soyabean bags reported for auctions here, according to sources.
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