MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ Bullion
Gold fell more than 1 percent on Friday, as the dollar and global shares rose, but fund buying persisted as investors expected a G20 summit would produce little in the way of a coordinated stimulus program. Financial leaders from G20 nations gathered in Shanghai against a backdrop of worsening economic conditions and a lack of wider consensus on how to fix the problems. Concerns that a slowing global economy could eventually push the United States into recession eased as data showed U.S. economic growth slowed less than expected in the fourth quarter. Despite Friday's losses, gold has rediscovered its role as a shelter for risk averse investors. Assets of SPDR Gold Trust, the top bullion exchange traded fund, held steady on Thursday, after rising to their highest since March 2015 on Wednesday. Economists had expected fourth quarter GDP growth to be revised down to 0.4%. The positive surprise underpinned the dollar and sent gold prices sharply lower. Hedge funds and money managers raised their bullish stances in COMEX gold to a one-year high in the week to Feb. 23, U.S. Commodity Futures Trading Commission data showed on Friday. SPDR Gold Trust, the world's largest gold-backed exchange traded fund, said its holdings rose 0.27 percent to 762.41 tonnes on Friday, the highest in about a year. With US economy staying on the sweet spot the possibilities of further interest rate hikes in this year have rose significantly from the beginning of this month, which has started to put pressure on gold prices . Domestically we have a big day as the government is going to present the general budget for the year 2016-2017, where it is expected to announce a policy to curb the gold imports which is putting burden on the current account deficit of the nation. Amidst the big economic event the markets can turn volatile as the prices on MCX are already trading at a discount in comparison to the COMEX prices in anticipation of a possible import duty cut .For the day we recommend a range based trade in gold.

✍ Energy
MCX crude oil prices on Friday gained more than 5%, registering at Rs.2316/bbl for March month contract.On weekly basis, WTI and Brent crude oil for April month contract gained around 3.20% and 6.30% respectively, whereas MCX crude oil for March month contract gained around 5%.Crude oil prices last week showed some relief as the market witnessed products side inventory levels moving down. Rest other than the products side inventories, crude stocks and stocks at Cushing was most negative. Cushing stocks moved more than 65 million barrels and are near to its threshold levels.Overall crude stockpiles as per last week crossed 507 million barrels, which is all time high levels. Apart from this, if we see the fall in Baker Hughes rig count data, it’s quite supportive for crude prices in long term. 10 continuous weekly fall in active crude oil rigs have left just 400 operational rigs in the US region. Average levels as shown on right hand side have gone down from a couple of months. International agencies are predicting the same to continue its downtrend till 2017, which is actually good for crude oil prices. Apart from this, refinery maintenance shutdown period is going on in the US region, during which they will produce less products and thus inventory withdrawals can be seen and also gasoline demand will surge. U.S. natural gas futures slid Friday on steady forecasts for two more weeks of warmer-than-normal weather, a day after the prior front month contract expired at its lowest level since 1999. Heating demand since the start of the industry's November-March winter season was running about 12 percent below normal in the lower 48 U.S. states due to the warming effect of the El Nino weather pattern. Meteorologists predict that warmth will continue into March, with heating demand expected to be 26 percent below normal, according to Thomson Reuters Analytic. Despite the lack of heating demand, however, consumers have used about 1 percent more gas than usual so far this winter as the power sector burns record levels of the fuel due to its low price compared with coal, which carries higher transport and environmental costs.

✍ Base Metal
Copper prices surged on Friday to their highest level in more than three months as investors hoped for a recovery in metals demand following stronger than expected U.S. economic data and a G20 policymakers meeting. Industrial metals joined rallies in oil and share markets as investors put fears about a struggling global economy on the back burner. U.S. consumer spending rose solidly in January while fourth quarter economic growth was revised up to 1 percent, higher than expected. Some analysts were wary, however, due to concern about growth in top metals consumer China. Copper demand growth in China slowed last year to about 2 percent and is not expected to improve significantly this year. China accounts for about half of global demand estimated at around 22 million tonnes. The metals market appeared to shrug off a firmer U.S. currency, which makes dollar-denominated commodities more expensive for non-U.S. firms, while oil rose as traders reversed bets on lower prices. Stock markets rose as G20 policymakers meeting in Shanghai sought common ground on how to reboot a struggling global economy in the face of renewed financial and political risks. Setting the tone for the Shanghai meeting of the Group of 20, China's central bank chief, Zhou Xiaochuan, said Beijing still had the room and tools to support the world's second largest economy
Industrial prices surged on Friday to their highest level in more than three months as investors hoped for a recovery in metals demand following stronger than expected U.S. economic data and a G20 policymakers meeting. The Baltic Exchange confirmed on Friday it had received a number of "exploratory approaches" after the Singapore Exchange Ltd revealed it was seeking to buy the business which has been the hub of the global shipping market for centuries.
The zinc price has pushed above its sister metal lead for the first time since November and is likely to remain ascendant in coming months as speculators step up zinc buying on forecasts of shortages while l

✍ NCDEX - WEEKLY NEWS LETTERS
Agri Sector Eye on Budget 2016
The Budget needs to outline measures to restore the health of the rural economy without increasing unproductive subsidy spend. Rating firm CRISIL highlight six broad areas that require innovative policy solutions:

1. Expand irrigation cover: In India, poor irrigation cover exposes agriculture to shocks from uneven rainfall patterns. At the all-India level, irrigation covers only 46.9% of the total cropped area, exposing the rest to monsoon shocks. Around 84% of pulses, 80% of horticulture, 72% of oil seeds, 64% of cotton and 42% of cereals are cultivated in unirrigated conditions. The combined spending of Center and states on irrigation has been a mere 2% per year of their total spending in the last five years.




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