MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
Gold
Friday saw another rise in the price of gold, a 16 per cent rise since the year began. However, with rising prices, the market has also slipped into a historically high discount for physical delivery. In the past two days, a discount of $30 an ounce or higher (Rs 680-700 per 10g) was quoted. In Ahmadabad on Friday, it was $32.5 an oz, by NCDEX poll data. Discounts are calculated on the cost of imports, including import duty. When supply is higher than demand at a time when bullion traders are not willing to hold stock for a longer while, they sell at a discount. Traders said in December, when prices were at a bottom, huge imports took place, higher than demand, and dealers had inventory of around 50 tonnes. That is now being offloaded with the rise in prices. Sudheesh Nambiath, lead analyst with GFMS Thomson Reuters, said: “Such a discount goes well with our demand estimates that there was heavy stocking in the December-ending quarter. With the price in rupee terms rallying significantly since January, it is only normal to see the metal up for sale." On Friday at Zaveri Bazaar here, standard gold of 0.995 purity in the spot market closed nearly one per cent or Rs 275 per 10g higher, to close at Rs 29,110. On Thursday, on the Multi Commodity Exchange (MCX), futures gold was quoted above Rs 30,000 per 10g. Since November, 300-325 tonnes of import is estimated to have happened. Nambiath said, “In some cases, it’s even better for jewelers to melt down their jewellery and sell as bars than wait for customers to come to their stores."
Gold's prospects for a sustained price rally are better than they have been for years as a weaker dollar, crashing oil prices and concerns about the global economy have revived its safe-haven status after years as the dog of global financial markets. The last time gold prices rose more than 10 percent in a 10-day stretch, the bullion market was in the last gasp of a decade-long rally that soon peaked at more than $1,920 per ounce in 2011.
Stocks advanced in Europe and Asia on Thursday, with the focus on energy companies as speculation U.S. interest rates may not rise at all this year left the dollar nursing hefty losses and oil held most of the previous day's big gains. The dollar fell sharply on Wednesday after weak U.S. data and comments from a Fed policymaker interpreted as signaling further rate hikes could be delayed.The U.S. currency fell 0.2 percent against a basket of its peers on Thursday, and held close to Wednesday's 14-week low against the euro and its weakest for a week against
Gold on Friday clung to sharp overnight gains that pushed the metal to a one-year high, and looked set to post its best week in over four years as stock market turmoil stoked safe haven demand. Stock markets fell worldwide on Thursday on fears over the health of the global economy and the banking sector, with MSCI's global stock index closing more than 20% below its all-time high. Safe-haven assets shone across the board. US 10-year Treasury yields hit their lowest since 2012, while the Japanese yen climbed to its highest in 15 months against the dollar. Spot gold rose to $1,260.60 on Thursday, its highest in a year, before paring some gains to close up 4% in its biggest daily gain in about 2-1/2 years. On Friday, it eased 0.8% to $1,236.60 by 0042 GMT. “The risk-off sentiment that pervaded markets overnight saw gold briefly push above $1,260 amid rising safe haven buying, making it the best performing commodity in 2016," ANZ analysts said in a note. For the week, spot gold is up 5.5%, the biggest weekly gain since October 2011. Tracking spot prices, US gold futures are set to post a gain of 7% for the week, the biggest such gain since 2008.

Crude Oil
Crude oil prices rose sharply by Rs 84 to Rs 2,107 per barrel in futures trade today as speculators widened their bets after it rallied in Asia. At the Multi Commodity Exchange, crude oil for delivery in March contracts was trading higher by Rs 84 or 4.15% at Rs 2,107 per barrel, with a business turnover of 1,501 lots. The oil for february delivery also moved up Rs 57 or 3.09% to Rs 1,901 per barrel, with a business volume of 8,441 lots. Market men attributed the rise in crude oil futures to a firming trend in Asian trade where it surged more than five% today, a day after tanking towards 13-year lows and following a report suggesting the OPEC producers' club was open to working towards cutting output to stabilize volatile crude markets. Meanwhile, West Texas Intermediate (WTI) crude prices for March delivery climbed $1.47, or 5.61% to $27.68 a barrel, while Brent for April also advanced $1.68 or 5.59% to $31.74 a barrel on the New York Mercantile Exchange. WTI settled at $26.21 a barrel yesterday, its lowest close since May 2003, and breaching bottoms set in January. The contract is down around 11% for the week.
Some OPEC countries are trying to achieve a consensus among the group and key non-members for an oil production "freeze", sources familiar with the discussions say, in an attempt to tackle the global glut without cutting supply. Top exporter Saudi Arabia might be warming to the idea, though it was too early to say whether the kingdom would give its blessing because any deal depends mainly on a commitment by Iran to restrict its plan to boost exports, the sources said.MCX Crude Oil Feb is trading at `1888. It is trading up by `44.

Copper
Copper prices fell further by 0.46% to Rs 302.75 per kg in futures trading today as participants engaged in reducing their positions, tracking a weak trend at spot market on low demand even as the metal strengthened overseas. At the Multi Commodity Exchange, copper for delivery in February declined by Rs 1.40, or 0.46%, to Rs 302.75 per kg, in a business turnover of 2,099 lots. Similarly, the metal for delivery in far-month April traded lower by Rs 1.10, or 0.36%, to Rs 307.10 per kg in 68 lots. Analysts said offloading of positions by traders on the back of subdued demand at domestic spot market, mainly influenced copper prices at futures trade. However, firm global trend where most industrial metals rose as the dollar retreated to a three-month low amid prospects for a delay in the tightening of US monetary policy, restricted the fall, they said. Meanwhile, copper for delivery in three month climbed 0.7% to $4,474 a metric tonne on the London Metal Exchange (LME).
Surging imports of copper into major consumer China should not be seen as a sign of stronger real demand, because higher shipments are pointing more to restocking of the metal. Imports of refined copper surged 34.4 percent in December from a year ago to a record 423,181 tonnes and expectations are that the January numbers will be high too. Stocks of copper in LME-approved warehouses at 227,300 tonnes are up about 40 percent since last August, while those in SHFE monitored depots have nearly doubled to 241,282



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