E MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ Bullion
Precious metals fell more than 1 percent on Friday after U.S. March payrolls data beat expectations, allaying some fears about the U.S. economy and stoking speculation about the timing of likely interest rate hikes by the Federal Reserve this year.The yellow metal fell during evening trade in the domestic market on Friday as investors and speculators took a cautious approach ahead of March jobs data from the US which may dictate the timing of the US Federal Reserve’s next interest rate hike. The US economy may have added 205,000 jobs in March, down from 242,000 in February, analysts estimated. A strong payrolls report may suggest a continued recovery in the US labour market, keeping the door open for a rate hike in the next few months. At the MCX, Gold futures for April 2016 contract is trading at Rs 28,485 per 10 gram, up by 0.22 per cent after opening at Rs 28,441, against the previous closing price of Rs 28,407. It touched the intra-day low of Rs 28,473
The fundamentals of gold are changing, as is visible from the sharp rise in its price (see chart) and receding fears of a rate increase by the US Federal Reserve. Since mid-December, prices have rebounded from multi-year lows, led by huge demand, mainly from US investors. So, after three (financial) years of negative return, gold managed to end with some gain for the 12 months ended March 2016. In India, too, gold has delivered positive returns, after two years of loss. However, since February, the yellow metal has come off a bit, due to profit booking and return of risk appetite. While gold might consolidate or see some more profit booking in the near term, experts say the fundamentals of gold are intact. While they say 2016-17 might not be a great year for gold investors in returns, they also advise that investors use the corrections to accumulate the precious metal, adding that at every fall, buyers are coming, thereby supporting the price.
In mid-December, when international prices hit a multi-year low of $1,051 an ounce and the US Federal Reserve ended uncertainty over rate increases, sudden demand emerged, led by US-based exchange-traded fund (ETF) investors and Indian importers. And, prices took a sharp U-turn.In the March '16 quarter, while demand for gold from major consumers like India was subdued, US investors were heavy buyers. Compared to global demand for physical gold of 186.6 tonnes and ETFs' purchase of 25.2 tonnes in the March '15 quarter, demand in the recently concluded quarter from the world's largest gold ETF, the US-based SPDR, alone was 178 tonnes. This has taken its total holding to 820 tonnes, a three-year high. The previous five quarters ending December 2015 had seen a combined gold investment demand of only 87 tonnes in the US. Now, with accommodative liquidity measures by the European Central Bank and Japan, coupled with the US Fed moderating its stance, this has led to the dollar's fall and return of risk appetite, leading to profit booking in gold. Silver prices rose 0.27% to Rs 36,892 per kg in futures trade largely in tune with a firm trend in global market. At the Multi Commodity Exchange, silver for delivery in far-month July traded higher by Rs 99, or 0.27%, to Rs 36,892 per kg in a business turnover of four lots. Also, the white metal for delivery in May rose by Rs 76, or 0.21% to Rs 36,405 per kg in 307 lots. In the international market, silver gained 0.03% to $15.23 an ounce in Singapore today. Market analysts said a firming trend in the global market, mainly influenced silver futures here.Holdings of the largest silverbacked exchange-traded-fund (ETF), New York's iShares Silver Trust SLV, stood at 10344.35 tonnes, remain unchanged from previous business day.



✍ Energy
Crude oil prices tumbled about 4 percent on Friday, after a Saudi prince reportedly said the kingdom will not freeze output without Iran and other major producers doing so, and data showed the global crude glut was likely to grow. Russia's oil production rose 0.3 percent to 10.91 million barrels per day in March, its highest level in nearly 30 years, raising questions over Moscow's commitment to freeze output ahead of a producers' meeting in Doha later in April.Crude oil futures plunged by over 4 per cent in the domestic market on Friday tracking a bearish trend overseas as investors and speculators shunned the energy commodity as Saudi Arabia, the world’s biggest crude exporter, shied away from a commitment to freeze output, exacerbating concerns over a growing global supply glut. Saudi Arabia’s deputy crown prince Mohammed bin Salman said that the kingdom will only freeze output if Iran and others follow suit. Salman added that if any country bolsters output, the Saudi kingdom will bolster crude sales. Iran which recently returned to the fold after a lift-off of international sanctions is aiming to boost production to pre sanction levels. Saudi Arabia’s u-turn signals increased uncertainty over the completion of a potential accord between major oil producers to cap output at a meet in Doha on April 17, leaving the risk of the market remaining oversupplied for quite some time. Meanwhile, the number of rigs drilling for oil in the US fell by 10 to 362 last week, signaling a continued drop in US production. Traders cast aside mostly positive US economic data as March payrolls gains topped estimates and manufacturing expanded for the first time in seven months, signaling an upbeat demand outlook for the fuel in the world’s biggest economy. Non-farm payrolls in the US climbed by 215,000 in March, compared to a revised 245,000 gain in February, topping analysts’ estimates for a 205,000 gain while wages picked up, a sign that the labour market recovery in the world’s biggest oil consumer remains on a strong footing in the face of a global slowdown.
Natural Gas ended in the red in the domestic and overseas market on Friday as investors and speculators cut positions in the energy commodity on worries that the market remains oversupplied. At 2.468 trillion cubic feet in the week ended March 25, 2016, total gas storage levels in the US remain nearly 52 per cent above average for this time of year as a moderate winter suppressed demand for the heating fuel while rising US production also bolstered supplies. At the MCX, Natural Gas futures for April 2016 contract closed at Rs 129.7 per mmBtu, down by 0.15 per cent, after opening at Rs 130.2, against the previous closing price of Rs 129.9. It touched an intra- day low of Rs 128.8.

✍ Base Metals
Amid muted demand in the domestic spot markets, copper prices fell 0.66% to Rs 324.40 per kg in futures trade today as speculators cut down their positions. However, a firm trend in the base metals pack at the London Metal Exchange (LME), capped the losses At the Multi Commodity Exchange, copper for delivery in April eased by Rs 1.10, or 0.66%, to Rs 324.40 per kg, in a business turnover of 1,914 lots. On similar lines, the metal for delivery in far-month June was trading down by Rs 2.10, or 0.63%, to Rs 329 per kg in 50 lots. Marketmen attributed the fall in copper prices at futures trade to a low demand at the domestic markets from consuming industries but metal's strength at the LME after the US Federal Reserve Chair Janet Yellen signalled that a rate hike was not likely to come before June, restricted the losses.Globally, copper used in pipes and wiring retreated 0.8% to $4,930 per tonne for delivery in three months at the LME.Industrial metals hit its highest in nearly three weeks on Friday after data showed China's factory sector grew for the first time in nine months, but metals faltered after U.S. jobs data raised the prospect of further interest rates increases.
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