MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ Bullion
Precious metals prices rose on Friday, buoyed by weak U.S. equity markets and chart-based strength, as it shrugged off a higher dollar and strong U.S. economic data suggesting a brightening outlook for the economy Gold Trust GLD, the world's largest gold-backed exchange traded fund, said its holdings stood at 851.13 up 5.94 tonnes, from previous business day. Holdings of the largest silver backed exchange-traded-fund (ETF), New York's i shares Silver Trust SLV, stood at 10421.95 tonnes, remain unchanged from previous business day.
Gold on MCX settled up 0.44% at 30034 buoyed by weak equity markets and chart-based strength, as it shrugged off a higher dollar and strong U.S. economic data suggesting a brightening outlook for the economy. Bullion has rallied 20 percent this year as concerns about the strength of the global economy prompted traders to pare expectations for U.S. rate increases by the Federal Reserve this year. Global demand for gold soared markedly during the first three months of the year, the World Gold Council said, saying that it was the strongest first quarter on record. Gold demand rallied a whopping 21% year-on-year to 1,289 tonnes in the first quarter, the industry-linked organization said, adding that the boom came on the back of especially strong investment demand – particularly for gold-backed ETFs, which saw inflows at 363.7 tonnes, rocketing over 300% and booking the highest point since the start of 2009. India's gold demand in the first quarter slumped 39 percent from a year ago due to a rally in gold prices, jewellers' strike and as consumers had delayed purchases hoping a cut in India's 10 percent import duty on gold in the national budget, the World Gold Council said. Dealers were offering discounts of up to $15 an ounce to the global spot benchmark this week, up from a discount of up to $12 in the previous week.
Silver on MCX settled up 0.42% at 40974 as prices recovered tracking firmness in gold and base metals prices after prices seen pressure after strong U.S. economic data suggested a brightening outlook for the economy. U.S. retail sales jumped 1.3 percent last month, the largest gain since March 2015 and a bigger rise than the 0.8 percent expected. The overall reading received a lift from auto sales, which surged 3.2% on the month. Still, core retail sales, which discounted the effects of auto purchases, increased by 0.8% above forecasts for gains of 0.5%

✍ Energy
WTI oil prices rose by 6.3 percent last week to close at $46.2 per barrel U.S. crude hitting six-month highs as investors weighed a forecast for tighter global supplies against signs of another storage build at the hub for U.S. crude futures. Worries of a major outage in Nigerian crude also boosted the market. Nigeria is Africa's largest oil producer and (Qua Ibo) the largest crude grade, set to account for 317,000 bpd of exports in June. It was not immediately clear by how much of the output was reduced by the pipeline problem. The U.S. government unexpectedly said crude inventories fell the first time since March, adding to concerns over supply outages in Canada and Nigeria.Crude oil settled flat as a slight uptick in OPEC production in April reinforced long-term concerns related to the excessive supply glut on global energy markets. OPEC said in its Monthly Oil Report for May that crude oil production last month rose by 188,000 barrels per day to average 32.44 million bpd, according to secondary sources. It came amid considerable increases in Iran, Iraq and Angola, partially offset by declines in Nigeria and Kuwait. Saudi Arabia, the largest producer in the 13-member cartel, saw its production fall slightly by 8,000 bpd to 10.125 million bpd. Output in the Saudi kingdom still remains near all-time record high.

✍ Base Metal
Copper on MCX settled up 0.45% at 309.85 after a string of declines as some investors closed out positions that had been betting on lower prices though others remained cautious ahead Chinese economic data .LME Copper prices plunged 3.8 percent to close at $4627.5 per tonne as dollar gained momentum after Taro A so, Japan’s finance minister, said it would be “natural” for the government to intervene in the markets if the yen keeps logging “one-sided” gains. However, sharp losses were cushioned as BOJ Governor Haruhiko Kuroda said on Thursday that the Bank of Japan is likely to expand monetary stimulus either in June or July. Also, producers from Codelco to Glencore Plc gave optimistic longer term outlooks at an industry conference in Miami as three years of declining prices deters production

Zinc on MCX settled up 1.32% at 126.5 as support seen after data showed inventories in warehouses registered with the LME continued to erode, falling to 390,375 tonnes. The figure is the lowest since July 2009, about two thirds below the record peak in 2013, although some stock is thought to have been shifted to cheaper storage outside LME warehouses. Zinc production will trail consumption by 352,000 metric tons this year, the ILZSG said in April, widening its deficit forecast from 152,000 tons in October. Combined zinc inventories in Shanghai, Tianjin and Guangdong fell 10,600 to 350,700 tonnes past week. Some goods were shipped from Shanghai to Tianjin as the price spread between Shanghai and Tianjin was bigger than freight charges. Zinc smelters preferred to deliver goods to Tianjin, reducing arriving shipments in Shanghai. But arriving shipments in Tianjin were also limited, with inventories down. Outward shipments in Guangdong increased due to bargain hunters, so local inventories also slid. Zinc stocks and cancelled warrants both down 1,125 tonnes at 390,375 tonnes and 25,375 tonnes respectively. Lead at $1,713 was up $2 after a marginal stock increase of 25 tonnes to 176,075 tonnes. TCs of domestic zinc concentrate (50%) held stable at 5,100-5,300 yuan per tonne (zinc content) this past week, and those for imported zinc concentrate (50%) were $110-130 per dry metric tonne. Supply tightness in North China is expected to ease, though, as an increasing number of mines restart due to warmer weather.
Nickel on MCX settled up 0.52% at 580.9 as prices bounced back as optimism over a rebound in U.S. economic growth overshadowed a stronger dollar, but high inventories are keeping market participants cautious about the future direction of prices. April retail sales recorded their biggest increase in a year, suggesting the economy is regaining momentum, and U.S. consumer sentiment rose to the highest levels since June last year. Nickel stocks fell 1,674 tonnes to 412,344 tonnes. In a move centred on Vlissingen, cancelled warrants dropped 4,116 tonnes to 120,720 tonnes. The cash/May date is looking tight at a small contango of just $1. Investors have been worried about reports that many Chinese smelters were reversing production cutbacks after prices rebounded, which would add to a global surplus. U.S. retail sales jumped 1.3 percent last month, the largest gain since March 2015 and a bigger rise than the 0.8 percent expected. The U.S. Census Bureau said retail sales last month jumped by 1.3%, above consensus expectations of 0.9%, rebounding from a 0.3% decline in March. The University of Michigan's Consumer Survey Center said its Consumer Sentiment Index soared nearly seven points in its mid-May flash reading to 95.8, significantly above consensus expectations of 89.7. It came weeks after consumer sentiment slumped to 89.0 in the final April reading, dropping to its lowest level since last September. In the May reading, though, the expectations component surged nearly 10 points to 87.5, pulling up the general index

✍ NCDEX - WEEKLY NEWS LETTERS
MAJOR NEWS
The India Meteorological Department (IMD) said on Sunday that the onset of southwest monsoon over the Kerala coast this year could be delayed by six days and that the rains would arrive around June 7. The forecast is with a model error of plus-minus four days. The normal onset date of the south-west monsoon is June 1, which marks the start of its four-month journey over the Indian sub-continent. Although the onset of monsoon is forecast to be delayed, its overall impact on the progress and performance is difficult to predict as of now. IMD is sticking to its forecast of “above normal” rains in 2016. IMD’s forecast of monsoon onset issued from 2005 to 2015 has proved to be correct in all years (with the error margin of plus or minus four days), except in 2015. Delay in monsoon onset is not an unusual phenomenon, said IMD Director General Laxman Singh Rathore. He, however, added there would be some relief to south Indian states from the intense heat as there could be some rainfall in the coming days
USDA forecasts India soybean production for 2016/17 at 11.70 million tons, up 58 percent from last year. The increase is based on the assumption of normal yields. Yield is forecast at 0.97 tons per hectare, up nearly 50 percent from last year and up 5.0 percent from the 5-year average. Harvested area is forecast at 12.0 million hectares, up 5.3 percent from last year. Poor growing conditions in 2015/16 resulted in historic low yields in the soybean producing areas. The summer monsoon ended a month earlier than normal for the majority of the soybean area and rainfall throughout the growing season was characterized as uneven and sporadic. Madhya Pradesh, the largest producer, experienced excessive rainfall and pest issues throughout the growing season which resulted in significant crop losses. However, dry weather in Maharashtra and Rajasthan caused crop losses in these districts.


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