MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ Bullion
Gold edged lower on Friday, but was not far off a 13-month peak reached in the prior session when a weaker dollar and technical buying gave bullion its best day in two weeks. Investors are eyeing crucial U.S. Non farm payrolls data due later in the day, where a strong reading for February could stall further gains in the precious metal, now up nearly 19 percent this year and among the top commodity performers. MCX Gold Apr is currently trading at `29730. It is trading up by `114 points for the day. MCX Silver May is currently trading at `37110. It is trading down by 384 points.
Gold gained more than two percent in the previous session on weak dollar and technical buying. U.S service sector data, which reported slower growth than in the previous month and a decline in employment in this sector for the first time in two years, weighed down the dollar. Meanwhile, investors are keenly awaiting the outcome of key U.S non-farm payrolls data which scheduled later in the day as a strong data could stall more gains in the commodity. Anyhow, gold is one of the top performing commodities so far during the year, gaining more than 19 percent since January. Worries over global economic growth, concerns over the health of the banking sector, poor U.S fourth quarter earnings coupled with speculation that the U.S Federal Reserve may not raise rates this year had also supported the sentiments. Gold is also drawing support from flows into the exchange traded funds. The assets of the world’s largest gold backed exchange traded fund the SPDR Gold Trust placed at its highest level last seen in September 2014. Increased import to India, the second largest consumer of the yellow metal supported the sentiments as well.

✍ Energy
Oil futures rose in Asian trade on Friday, buoyed by renewed optimism prices may have bottomed out after official US data showed oil production fell to its lowest level since November 2014. Brent futures nudged up 3 cents to $37.10 a barrel as of 0147 GMT after settling 14 cents higher in the previous session. MCX Crude Oil Mar is trading at 2350.The crude benchmark is set to end the week with a gain of more than 5%. US crude futures had climbed 13 cents to $34.70 a barrel, after settling down 9 cents in the previous session. While US crude inventories rose to a new record of 517.98 million barrels last week, output fell for a sixth straight week to 9.08 million barrels a day, according to data from the US Department of Energy's Energy Information Administration. Cuts in US production are providing price support, but investors are also waiting for key US economic data later on Friday to give further direction, said Ben Le Brun, market analyst at Sydney's Options X press."A lot of traders are keeping their powder dry in front of non-farm payroll data - it's the number one (indicator) in terms of crude consumers," he said.
Natural Gas futures shed more than 1 per cent during noon trade in the domestic market on Friday as investors and speculators exited positions in the energy commodity as hefty storage levels exacerbated concerns of oversupplies as the end of the winter heating season threatened to curb demand for the fuel in the US, the world’s biggest consumer. US gas supplies fell by only 48 billion cubic feet last week compared to a five-year average withdrawal of 137 billion cubic feet, well below the 227 billion cubic feet drop a year ago and 117 billion cubic feet decline a week ago, the EIA said on Thursday. At the MCX, Natural Gas futures for March 2016 contract is trading at Rs 110.10 per mmBtu, down by 1.43 per cent, after opening at Rs 111.20, against the previous closing price of Rs 111.70. It touched an intra-day low of 109.50. (At 14:12 PM)

✍ Base Metal
Copper futures advanced during evening trade in the domestic market on Friday as investors and speculators booked fresh positions in the industrial metal amid a pickup in physical demand for copper in the domestic spot market. Further, traders pinned their hopes on China, the world’s biggest metals consumer, to announce more growth boosting measures when the country’s leaders begin legislative meetings on Saturday, to help steer the economy from the threat of a hard landing. A Chinese central bank official stressed that the country’s monetary and currency policies will remain stable. At the MCX, Copper futures for April 2016 contract were trading at Rs.334.30 per 1 kg, up by 0.95 per cent, after opening at Rs. 331.75, against the previous closing price of Rs. 331.15. It touched the intra-day high of Rs. 336.50 (At 16:48 PM).
Zinc futures retreated during noon trade in the domestic market on Friday as investors and speculators exited positions in the industrial metal amid weak physical demand for zinc in the domestic spot market. Further, soft US data signaled sluggishness in the world’s biggest economy, clouding the metal’s demand outlook. US services growth cooled in February as the gauge fell to 53.4 from January’s 53.5, factory orders grew by a less than expected 1.6 per cent in January while jobless claims climbed 6,000 to 278,000 last week. At the MCX, Zinc futures for March 2016 contract is trading at Rs 123.55 per kg, down by 0.24 per cent after opening at Rs 123.55, against the previous closing price of Rs 123.85. It touched the intra-day low of Rs 123.30. (At 12:31 PM).
Aluminum production in Venezuela continued to drop in 2015 though iron ore recovered slightly, the Ministry of Industry said in its annual report, after a year of labor conflicts, timid investment and a deep recession.London copper was targeting its largest weekly advance in four months on Friday as renewed risk appetite fuelled support for commodities on hopes for further monetary stimulus from China, and signs of a stronger economy in the United States.Three-month copper on the London Metal Exchange climbed by 0.4 percent to $4,875 a tonne, extending a 1.4 percent gain from the previous session.

✍ NCDEX - WEEKLY NEWS LETTERS
Union Budget 2016
Increased allocation for price stabilization fund in the budget 2016-17 will help to check prices of essential commodities, especially of pulses. The ministry of consumer affairs has already prepared an action plan for this purpose. More than 50,000 MT pulses have been procured from the farmers by various Government AGENCIES at the market prices and decision to import 20,000 MT pulses has been taken. Total buffer stock of 1.50 lakh MT pulses is being created and import of 6000 MT pulses has already been ordered. These efforts will certainly help to keep prices under check, he asserted. Besides increase in price stabilization fund from Rs. 500 crore to Rs. 900 crore in the budget, the government has also allocated Rs. 500 crore to promote pulses production during current fiscal year. The operation of the fund has also been transferred to the Department of Consumer Affairs from Ministry of Agriculture for better coordination and timely action. Regarding implementation of Food Security Act, by next month, the Act will be rolled out in all the states expect Tamil Nadu. The process of demystifying the Budget began some years ago, when the government would introduce new duties or revise rates whenever the need arose. Take steel. Delhi first announced a 20 per cent safeguard duty on hot-rolled coil in mid-September and then, much to the industry's relief, introduced in February minimum import prices of $341 and $752 a tonne on 173 products.Why should the government wait for the Budget when the debilitating impact of import surges on domestic steel makers was already in evidence? The US administration's response to steel imports from China and Russia, with dollops of subsidy proving hurtful to local industry, is found to be much faster and effective than of either India or the European Union.

Finance Minister Arun Jaitley has only partly met the aluminum industry's demand by raising the import duty on primary metal to 7.5 per cent from five per cent. The industry was hoping for a uniform import duty of 10 per cent on primary aluminum and scrap, which will continue to invite a small duty of 2.5 per cent. Even this small mercy was not expected, given the observation in the Economic Survey that raising the customs duty to curb imports of the silvery white metal might affect the "competitiveness of downstream sectors like power, transport and construction". The Survey, however, acknowledged the local industry's capacity use is now down to 50 per cent, against nearly 100 per cent in 2014-15. This has happened because the share of aluminum imports in the country's use of the metal is up sharply to 56.5 per cent in 2015-16 from 39.8 per cent in 2011-12.

Unfortunately for the industry, the government overlooked the fact that in the country's import of 1.563 million tonnes (mt) of aluminum in 2014-15, the share of scrap and waste was as much as 860,000 tonnes. By leaving the aluminum scrap import duty unchanged, the government has kept the door open for the large-scale imports, which converters are suspected to be using to make electricity conductor lines. These should ideally be made from primary aluminum to avoid power losses during transmission. The commerce ministry reportedly found merit in the industry's demand for a uniform duty on scrap and primary metal. At the current level of capacity use, the industry, which in recent years



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