MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ PRECIOUS METAL
China expects its energy consumption to grow in 2016, the official Xinhua news agency of the world's largest energy consumer said on Tuesday.

Saudi Arabian Oil Minister Ali al-Naimi said the kingdom, the world's top crude exporter, does not limit its output and has the capacity to meet additional demand, the Wall Street Journal reported on Wednesday.

U.S. crude stocks rose unexpectedly last week on a bigger-than-expected build in distillate and gasoline inventories and higher imports, data from the Energy Information Administration showed on Wednesday. Crude inventories rose by 2.6 million barrels in the last week, compared with analysts' expectations for an decrease of 2.5 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 892,000 barrels to a record, EIA said. Gasoline stocks rose by 925,000 barrels, compared with analysts' expectations in a Reuters poll for a 896,000-barrel gain. Distillate stockpiles, which include diesel and heating oil, rose by 1.8 million barrels, versus expectations for a 1.0 million-barrel increase, the EIA data showed.

✍ Gold
Gold's image as a haven asset has taken a battering with the metal heading for its third-straight annual loss amid the sale of gold-backed funds by investors. Bullion for immediate delivery rose 0.2 per cent to $1,063.22 an ounce at 3:32 pm. in Singapore after declining 0.7 per cent on Wednesday, according to Bloomberg generic pricing.It's down 10 per cent this year following a 1.4 per cent drop in 2014 and a 28 per cent loss in 2013. Gold is in the longest slump since 2000 as the dollar surged on the back of monetary policy tightening in the US, joining a collapse in prices of commodities from iron ore to oil. Holdings in gold exchange-traded products have declined 10 times in the last 13 sessions to 1,466.45 metric tons, near the lowest in more than six years. "Gold is suffering from the general exodus out of commodity investments," Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail. Being one of the most-traded commodities through ETF's, the selling pressure from paper investors has been felt particularly hard and gold's safe-haven status has suffered." Gold will face a tough challenge at the start of 2016 and prices may drop toward the $1,000 level before recovering toward $1,200 by the end of the year as the dollar and bond yields retreat, Hansen said. The first interest rate increase since 2006 took place this month and traders are now looking to the pace at which the Federal Reserve will raise borrowing costs in 2016. While HSBC Holdings Plc predicts just two rate increases, Goldman Sachs Group Inc. is among banks that see four. Bullion will drop to $950 by the end of next year, according to Barnabas Gan, an economist at Oversea-Chinese Banking Corp., who's the top ranked precious metals


forecaster.Spot silver is also headed for a third year of declines after dropping 11 per cent in 2015. Palladium slumped 31 per cent, the most since 2008, while platinum lost 28 per cent. The two metals, used in catalytic converters that curb car and truck emissions, fell this year partly because of the Volkswagen AG emissions scandal, which hurt prospects for demand.

Gold fell on Wednesday, as the combination of a firm dollar and weak oil prices left the metal on track for its third consecutive annual loss. Bullion has lost 10 percent of its value this year, largely on concerns that higher U.S. interest rates would hurt demand for the non-yielding asset. With little market-moving data due this week, bullion traders will rely on cues from the currency and oil markets, analysts said. Following the U.S. Federal Reserve's move to raise interest rates for the first time in nearly a decade this month and indications that the central bank would resort to gradual increases in 2016, the outlook for gold does not look bullish. Gold typically follows oil as the metal is often seen as a hedge against oilled inflation. Brent crude oil retreated towards 11-year lows on Wednesday as Saudi Arabia's oil minister made it clear the kingdom had no plans to scale back its output. Investor interest in gold remained absent, with assets of SPDR Gold Trust, the top gold-backed exchange-traded fund, still near a seven-year low. Speculative short positions on COMEX gold contracts are close to an all-time high.

Gold prices fell over nine per cent in 2015, recording its third consecutive year of decline, after investors sought refuge in other asset classes, primarily equities and currencies, for higher returns. Starting the year at $1,184.86 an oz (ounce) gold remained highly volatile throughout 2015 before closing at $1,067 an oz in London. Over five per cent depreciation in the rupee against the dollar, however, cushioned domestic prices that fell 5.7 per cent to Rs 25,450 per 10 grams The pressure on gold was due to the intermittent recovery in the US economy led by a frequent drawdown in its unemployment. US Fed Chair Janet Yellen finally announced a 0.25 per cent hike in interest rate in December 2015 after deferring it for a few times during the year. But, a dovish outlook on US interest rate helped gold from falling sharply. "More than the 0.25 per cent of interest rate hike, Yellen's language on the US economy was important in terms of future rate hikes. Ideally, gold should have fallen after the interest rate hike, but, it moved in a close range which indicates that nothing can be said firmly on the US economic growth for future," said Jayant Manglik, president (retail distribution), Religare Equities. Silver followed suit due to lack of investment demand and global economic slowdown led by China. The white precious metal hit its five-year low in July 2015 following the rout in other industrial commodities. It fell 11.8 per cent to $13.86 an oz from $15.71 an oz on December 31, 2014. A strengthening US dollar added further pressure on precious metals. "Events that supported gold's fall in 2015 look to continue in 2016 with many developed economies (China, Japan and European countries) getting a booster of quantitative easing to protect them from falling," said Gnanasekar Thiagarajan, Director, Commtrendz Research. Quantitative easing may further strengthen the US dollar. Since the dollar is inversely correlated with gold and silver may remain under pressure in 2016.


✍ Crude Oil
Saudi Foreign Minister Adel al-Jubeir said Iranian diplomats had 48 hours to leave the kingdom and Iran's supreme leader said Saudi Arabia would face "quick consequences" for executing the cleric. Fearing further upheaval in the already volatile Middle East, the United States has urged regional leaders to take measures to soothe tensions. At around 0230 GMT, US benchmark West Texas Intermediate for delivery in February was up 48 cents, or 1.30%, at $37.52 and Brent crude for February was trading 61 cents, or 1.64%, higher at $37.89. "Oil started the new year on the mend, as Asian markets reacted to fears that geopolitical tensions in the Middle East may threaten the supply of oil," said Bernard Aw, market strategist at IG Markets in Singapore. Despite the rise, Aw said however that the persistent global crude oversupply will continue to weigh down on prices over the longer term. "Unless we see a convincing drop in oil output from these two nations, and the broader oil producing community, the supply glut issue will persist, which means oil prices would remain under pressure for a longer period," he said. Saudi Arabia is the biggest producer in the Organization of the Petroleum Exporting Countries, which last month decided against cutting output levels despite a plunge in oil prices. Iran is also a key OPEC member.
Crude prices fell more than 3 percent on Wednesday, with Brent sliding toward 11-year lows, after an unusual build in U.S. stockpiles and signs Saudi Arabia will keep adding to the global oil glut. Crude inventories in the United States, the world's largest petroleum producer, rose 2.6 million barrels last week, the U.S. Energy Information Administration said. Analysts polled by Reuters had expected a draw of 2.5 million barrels. Stockpiles hit record highs at the Cushing, Oklahoma delivery hub for Crude prices, however, did not lose much after their initial decline on the EIA data. Some attributed that to thin, holiday-season volumes. WTI's front-month contract traded just over 240 million barrels on Wednesday, about half of levels seen two weeks ago, Reuters data showed. Crude prices began falling on Tuesday itself, retracing gains in postsettlement trade after preliminary inventory data from industry group American Petroleum Institute showed a build.



For Quick Trial – 08962000225
Or mail us here: [email protected] or visit http://www.ways2capital.com/free-trial.php
Contact 0731-6554125
Toll Free – 1800-3010-2007
Give a Missed Call for Free Trial - 09699997717
For Reports And Tracksheets - http://www.ways2capital.com/downloads.php