MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ Bullion
Gold prices fell by 0.19 per cent on Friday as market players continued to price in the improved chances of multiple rate increases from the Federal Reserve this year following hawkish comments from the US central bank on the likelihood of a June rate hike. Federal Open Market Committee (FOMC) said in the minutes from its April meeting that it will likely raise short-term rates at its next meeting in June if the economy continues to improve as expected. Gold futures for June 2016 contract, at MCX, were trading at Rs. 29,740 per 10 grams, down by 0.19 per cent after opening at Rs. 29,718 against the previous closing price of Rs. 29,797. It touched the intra-day low of Rs. 29,698 till the trading. (At 12.40 PM today). However, a weaker dollar raised the appeal of gold as an alternative asset. Weaker greenback makes the bullion cheaper for those holding other currencies, thus increasing demand.Downward pressure briefly increased after U.S. data showed the number of Americans filing for unemployment aid fell last week, the latest sign that the economy was regaining speed after stumbling in the first quarter. The U.S. central bank will likely raise interest rates next month if economic data points to stronger second-quarter growth as well as firming inflation and employment, according to minutes from the U.S. central bank's April policy meeting. The indications followed a Fed policymaker's comment on Tuesday he would push for an interest rate hike in June or July, and two other Fed officials, who predicted up to three rate increases this year
Last week spot silver prices declined by 3.4 percent to close at $16.5 per barrel. The fall in silver prices is in line with declined in gold prices and fall in the base metals complex.Silver futures were trading higher during noon trade in the domestic market on Friday tracking a bullish trend in the global market as the sharp losses in the previous session amid bets of a Fed rate hike in June, offered a good bargain buying opportunity, to traders, in the precious metal, at existing levels. New York Fed President William Dudley stressed that the world’s top central bank is moving closer to tightening interest rates at one of its two upcoming meetings while Richmond Fed’s Jeffrey Lacker also called for higher interest rates. Silver, a non-interest bearing asset, loses sheen during a rising interest rate scenario. At the MCX, Silver futures for July 2016 contract is trading at Rs. 39,910 per Kg, up by 0.22 per cent, after opening at Rs. 39,773, against a previous close of Rs 39,824. It touched the intra-day high of Rs. 39,945

✍ Energy
Crude oil prices rose by 1.16 per cent on Friday on a rebound from overnight losses with US rig count data later in the day expected to set the tone. At the MCX, crude oil futures for May 2016 contract were trading at Rs. 3,317 per barrel, up by 1.16 per cent, after opening at Rs. 3,291 against the previous closing price of Rs. 3,279. It touched the intra-day high of Rs. 3,326 till the trading. (At 12.15 PM today). Prices rose as turmoil in Nigeria, shale bankruptcies in the United States and crisis in Venezuela all contributed to tightening supplies. Despite this, brimming inventories across the world were preventing supply shortfalls and sharper price spikes, traders said. ANZ bank said that unexpected supply disruptions across the world, excluding output falls in the United States, amounted to around 2.5 million barrels of daily production, virtually erasing a production overhang that had pulled down prices by over 70 percent between 2014 and early 2016.The prospect of a U.S. rate increase in June prompted investors earlier on Thursday to cash out of long positions in Brent and U.S. crude's West Texas Intermediate (WTI) futures. Suncor extended a force majeure that will prevent any more shipping of oil this month from its Syncrude facility. The decision came amid a raging wildfire in Canada's oil sands region that has shut output capacity by more than 1 million barrels per day. In Nigeria, ExxonMobil said operations at its Qua Iboe crude oil terminal were disrupted by "criminal" activity, although the plant was still produ
Natural Gas futures fell in the domestic market during noon trade on Friday as investors and speculators exited positions in the energy commodity as rising US supplies signaled weak demand for the power plant fuel in the world’s biggest gas consuming nation. The EIA on Thursday said that US gas stockpiles climbed by 73 billion cubic feet to 2.754 trillion cubic feet in the week ended May 13, 2016. Total gas storage in the US is 28.8 per cent higher than the levels a year ago and 28.9 per cent above the five-year average. At the MCX, Natural gas futures for June 2016 contract were trading at Rs.138 per mmBtu, down by 0.22 per cent, after opening at Rs. 136.8, against the previous closing price of Rs. 138.3. It touched the intra-day low of Rs. 136.10 till the trading.

✍ Base Metal
Copper prices declined by 0.5 percent last week to close at $4578 per tonne as latest FOMC minutes showed the central bank was likely to raise rates in June if economic data pointed to stronger secondquarter growth and firmer inflation and employment. Further, Philly Fed manufacturing index fell to -1.8 in May, weighed on the recovery in the manufacturing sector.Copper prices rose by 0.64 per cent on Friday after the number of residential building permits granted in Germany jumped by nearly a third to over 84,000 in the first three months of 2016, boosting expectations that construction will continue to support growth in Europe's largest economy which raised the demand outlook for the industrial metal. The Federal Statistics Office said authorities issued permits for 72,335 new residential buildings and approved construction work at 12,454 existing buildings. At the MCX, copper futures for June 2016 contract were trading at Rs.312.70 per 1 kg, up by 0.64 per cent, after opening at Rs. 310.95 against the previous closing price of Rs. 310.70. It touched the intra-day high of Rs. 313.65 till the trading. (At 4.45 PM today). Prices also rose due to the decline in the copper stockpiles at the London Metal Exchange (LME) on account of the strong demand for the commodity. LME copper stocks fell by 2875 metric tonnes to 155725 metric tonnes as on May 20, 2016.
Nickel futures surged in the domestic market during evening trade on Friday as investors and speculators booked fresh positions in the industrial metal amid a pickup in physical demand for Nickel from alloy-makers in the domestic spot market. Upbeat US economic data also signaled improved demand prospects for the industrial metal in the world’s biggest economy. US jobless claims fell by 16,000 to 278,000 last week, a sign that the US labour market recovery remains intact while a leading index climbed 0.6 per cent in April from the previous month, data showed on Thursday. At the MCX, Nickel futures for June 2016 contract were trading at Rs.580.50 per 1 kg, up by 0.29 per cent, after opening at Rs. 579.20, against the previous closing price of Rs. 578.80. It touched the intra-day high of Rs. 583.30 till the trading
Zinc futures rose by 1.12 per cent to Rs 126.75 per kg today due to the decline in the zinc stockpiles at the London Metal Exchange (LME) on account of the strong demand for the commodity. LME zinc stocks fell by 600 metric tonnes to 386750 metric tonnes as on May 20, 2016. Zinc futures for May 2016 contract, at MCX, were trading at Rs 126.75 per kg, up by 1.12 per cent after opening at Rs. 125.35 against the previous closing price of Rs. 125.35. It touched the intra-day high of Rs. 127 till the trading. (At 4.10 PM today). Prices also rose as speculators raised positions in the midst of a strong trend globally. Besides, strong demand in domestic spot markets fueled the uptrend. Major refined zinc exporting countries are Canada, Australia and Rep. of Korea, while major refined zinc importing countries are China, USA and Germany.



✍ NCDEX - WEEKLY NEWS LETTERS
India Meteorological Department said on Monday the late arrival of the monsoon will not delay crop sowing and that rains are expected to make rapid progress after their arrival around June 7.
Monsoon rains, the lifeblood for agriculture-dependent India, typically arrive on the southern tip of Kerala state by around June 1 and cover the entire country by mid-July. On Sunday the IMD said the monsoon would arrive by June 7. Pre-monsoon showers will set the stage for sowing and rains are expected to gather momentum once monsoon arrives by June 7. Millions of farmers plant rice, cane, corn, cotton and soybean crops in the rainy months of June and July. Harvesting starts from October. The monsoon season delivers about 70 per cent of India's annual rainfall. It is critical for the country's 263 million farmers because nearly half of their farmland lacks irrigation. Bountiful rains could keep a lid on inflation and also encourage the Reserve Bank of India to cut interest rates after the central bank in April eased its repo rate by 25 basis points to its lowest in more than five years.





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