MCX - WEEKLY NEWS LETTERS

1. Important News
1. US Unemployment Claims fell to 289,000 for the w/e on 1st Aug’14.

2. Utilities added 82 bcf of Natural gas into storage last week.

3. UK’s Official Bank Rate at 0.5 percent in the month of August.

4. China’s trade surplus surged to a record $47.3 billion in July.

5. German Industrial Production grew by 0.3 percent in month of June.

US Data
The US Dollar Index (DX) traded on a positive note and gained marginally around 0.1 percent in yesterday’s trade on the back of weak market sentiments which led to increase in demand for Further, favorable jobless claims data from the country supported an upside movement in the DX. The currency touched n intra-day high of 81.72 and closed at 81.61 on Thursday.
US Unemployment Claims declined by 14,000 to 289,000 for the week ending on 1st August 2014 as against a rise of 303,000 in the prior week

Indian Currency
The Indian Rupee retreated from five month low and appreciated around 0.4 percent in yesterday’s trading session. The currency appreciated on the back of selling dollars by Reserve Bank of India (RBI). It is assumed that central bank sold dollars through state run banks at 61.5-level to prevent further depreciation in the currency which was seen in the previous session.
Further, government allowing Foreign Direct Investment (FDI) of 49 percent in defense along with allowing greater investment in railway infrastructure continued with positive movement in the currency



2. Precious Metals

Spot gold prices rose on Thursday on increasing safe haven bids and gained more than half a percent amid rising tensions in Iraq and Ukraine. Prices turned positive on reports that U.S. President Barack Obama was considering air strikes and emergency relief airdrops to help 40,000 religious minorities in Iraq, who are trapped on a mountaintop after threats by Islamic militants.
On the contrary, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 2.4 tonnes to 797.65 tonnes on Wednesday.
On the MCX, gold prices gained by 0.48 percent and closed at Rs.28770/10gms.
Spot silver prices declined by half a percent in contrary to the strong trend in gold prices although US president said that they are considering air strikes on Iraq. Declining speculative interest in the metal, strength in the dollar index coupled with profit booking at higher levels led to the weakness. However, strong performance in the base metals complex cushioned sharp downside in prices. On the MCX, silver prices declined marginally by 0.2 percent in line with weakness in international markets.
Gold and silver prices to trade on a positive note on escalation of geo-political conflict between Russia and Ukraine on one hand and tensions in Iraq on the other hand. However, declining investor interest in the ETF holdings as indicated by liquidation in SPDR gold trust will exert downside pressure on prices. On the MCX, gold and silver prices are expected to trade on a positive note taking cues from strong international markets and rupee weakness

3. Base Metals
LME Copper prices gained 0.3 percent yesterday owing to decline in unemployment claims data from the US that pushed the average over the past month to an eight-year low, a sign the labor market continues to gain momentum in the second biggest consumer.
However, the European Central Bank signaled that it stands ready to print money and buy bonds if the euro zone slides towards deflation and warned the conflict in Ukraine poses a serious risk to the bloc's economy. Also, weak global market sentiments coupled with strength in the DX exerted downside pressure on prices. The red metal touched an intraday high of $7018/tonne before closing at $6985/tonne on Thursday. MCX Copper prices rose 0.4 percent in line with strength in international markets and closed at Rs.431.7/kg.
LME copper prices to trade lower today as investors will remain cautious ahead of Chinese inflation data due tomorrow and geopolitical tensions in Ukraine. However, sharp fall will be cushioned as China’s export growth unexpectedly accelerated in July thereby suggesting global demand will help the government achieve its 2014 economic-expansion goal of about 7.5 percent. In the Indian markets, base metals will trade on a negative note taking cues from weakness in international markets.
4. Energy
Crude oil prices traded positive on Thursday after reports the United States was considering airstrikes on advancing Islamic militants in Iraq revived concerns about supply disruptions from OPEC's No. 2 oil producer. However, White House spokesman Josh Earnest would not confirm that airstrikes were being considered. "There are no American military solutions to the problems in Iraq," he said.
On the contrary, ample global supplies were still pressuring oil prices, noting that oil supplies from Iraq had not yet been interrupted. Meanwhile, refining issues in the United States, including the four-week shut-down of a refinery in Coffey ville, Kansas, are weighing on U.S. crude, ahead of the refinery turnaround season in autumn, characterized by typically weaker demand.
On the MCX, crude prices gained by 0.5 percent taking cues from strong international markets and rupee weakness closing the session at Rs.5987/bbl. crude oil prices to trade sideways as escalating tensions in Iraq coupled with heightening Geo-political tensions between Russia and Ukraine will lift crude prices.
On the other hand, ample supplies in the US coupled with refining issue in the US affecting demand will exert downside pressure on prices.
On the MCX, crude prices are expected to trade sideways following mix set of factors in the international markets while rupee weakness might lift crude prices in the domestic markets.


NCDEX - WEEKLY NEWS LETTERS
CHANA
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With prices having fallen to very low levels, and Festive season demandstarting to rise, Chana rates shot up in the Spot and Futures markets.Signs of lower rainfall activities in Central India too supported the market sentiments as traders expect that with present rates being on the lower side, further fall may be limited as demand starts picking up.
The sowing for Kharif Pulses has picked up over last few weeks and that had been preventing strong uptrend for Chana rates despite improved demand in mandis. Repeated efforts by the Govt to keep tab on hoarders mainly for essential Food items are also keeping the uptrend limited.
Higher Pulses production for 2013-14 has been keeping sentiments weak so far. As per 3rd Advanced crop estimates by Govt of India,India is likely to produce record Food grains in 2013-14 at 264.38MT. Record production in Tur(3.38MT), Chana (9.93MT) and overall Pulses at a record 19.57 MT
On International front, Australian Chana production reportedly has fallen by 23%. A fall in Dollar vs Re has kept the import cost of Pulses from Myanmar, Australia and Canada low resulting in further weakening of market sentiments
In the first nine months of fiscal2013-14, pulses arrivals from abroad aggregated 2 MT; for the whole year, imports are projected at2.6 MT, sharply down from 3.8 MT last year, according to Commerce Ministry data.

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