MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
GLOBAL NEWS
Alcoa Inc said on Thursday it will permanently close its 269,000 tonne-per-year Warrick Operations smelter in Evansville, Indiana, by the end of first quarter, the latest in a string of U.S. smelter curtailments as producers struggle with tumbling prices. Warrick is the largest operating aluminum smelter in the United States, and its closure will leave Alcoa with just one active smelter: 130,000 tonne-per-year Massena West, which was saved from closure with $70 million in aid from New York state.
The Indian Rupee fell to its lowest level since September ’13 and depreciated by 0.7 percent in the last week mainly due to strong demand for the American currency from importers and banks. Mixed trading in the Asian markets governed the trend of the Indian markets and its currency. However, US Dollar Index’s weakness against some other currencies overseas limited the rupee’s fall. Domestic markets i.e. Sensex and Nifty closed in negative after the oil prices plunged to lower levels which heightened fears about the global economy. Moreover, disappointing release of inflation, industrial and WPI data from the nation further dented the market sentiments.
The US Dollar Index strengthened by 0.8 percent in the last week as market discounted the robust release of job openings and Non-Farm Employment Change data from the nation. The number of job openings rose more than expected in November thereby infusing optimism in the market with respect to an improving labor market and strength of the economy.

Gold
On the MCX, gold prices rose by 0.5 percent last week to close at Rs.26112 per 10 gms ,Last week, spot gold prices declined by 1.4 percent to close at $1088.7 per ounce Prices traded to a 1-1/2-week low on Thursday, pressured by a U.S. Federal Reserve president's comments about potentially rethinking further rate hikes, triggering technical sell signals while shrugging off a rebound from 12-year lows in oil prices. St. Louis Federal Reserve President James Bullard said a continued decline in inflation expectations may change his outlook for further Fed rate hikes, though so far he feels the United States continues on a healthy track. Chicago Federal Reserve Bank President Charles Evans said he was nervous about the potential effects of China's slowdown on the U.S. economy and about the possibility that inflation expectations may be slipping
India’s gold import in December 2015 is estimated to have crossed 100 tonnes following sharp increase in demand for the precious metal during the first and the last week of the month when prices fell sharply world over. With 105 tonnes of estimated imports in December, total gross import in 2015 crossed 900 tonnes which was 25 per cent more than 2014. In terms of value, it was up about 12 per cent at around $35 billion, as December import bill was around $3.7 billion. India imported $31.17 billion worth gold in 2014. Sudheesh Nambiath, lead analyst, GFMS Thomson Reuters said, “Gold demand increased in December when prices were at the lowest level in 2015, and as retailers increased their inventory to optimum levels. Our estimate for December import is 107 tonnes." In 2015, just over 700 tonnes gold was net import as rest was duty-free imports for re-export after value addition. Despite sharp spurt in quantity imported, import bill went up by only 12 per cent because of low prices in international market. Average international gold price fell by 8 per cent in 2015 while the price oscillated in a $246 range. In other words, gold prices in international market fell by nearly 20% from the annual high. The import bill low also because more imports took place when prices fell below $1,100 per ounce. On the other hand, significant increase in import of unrefined or dore gold happened at a premium pricing, which at times was a percentage over the LBMA price. Its share in total supply increased from some 15% to 30% in 2015. Mostly dore is imported at a premium over the LBMA gold PM price because of heavy competition at sourcing, given the 2 per cent differential that refiners in excise-free zone enjoy. Dore gold import in net gold purity terms was more than 200 tonnes as per estimates of GFMS Thomson Reuters. Gold import in November was 98 tonnes. In March and August 2015, gold import had crossed 100 tonnes mark as prices were lower, according to GFMS. Gold demand in the last two weeks has again remained subdued because of traditional belief that this period is inauspicious to buy precious metal. A bullion dealer said, “Indian demand for gold may or may not increase even when prices are around bottom but they take inauspicious days seriously." During 2015, there were apprehensions about gold demand from rural sector because agriculture output was impacted due to poor rains. However, according to Nambiath, “Pent up demand at lower price levels and expectation for further weakening of Indian rupee added to the gains."
Gold prices surged Rs 340 to hit over two-month high of Rs 26,550 per ten grams at the bullion market today, taking positive cues from global market amid pick up in buying by jewellers to meet wedding season demand. Silver too recovered and reclaimed the Rs 34,000-mark by rising Rs 220 to Rs 34,015 per kg on increased offtake by industrial units and coin makers. A weaker rupee, which plunged to hit fresh 28-month low of 67.59 against the dollar yesterday that made imports costlier also supported the upside in gold prices. Bullion traders said sentiment got a boost after gold gained the most in six weeks overseas as Chinese stocks fell into a bear market and the US retail sales capped the weakest year since 2009, increasing demand for precious metals. Gold in New York, which mostly determines the price trend in the Indian market, rose 0.96 per cent to USD 1,088.80 an ounce and silver gained 0.61 per cent to USD 13.91 an ounce in the yesterday's trade. Moreover, increased buying by jewellers at domestic markets, driven by wedding season also buoyed sentiment. Back home, in the national capital, gold of 99.9 and 99.5 per cent purity surged by Rs 340 each to Rs 26,550 and Rs 26,400 per ten gram respectively, a level last seen on November 3 last year. It had shed Rs 40 yesterday. Sovereign gold followed suit and edged higher by Rs 100 to Rs 22,400 per piece of eight gram. A similar trend was also seen in silver ready that recovered by Rs 220 to Rs 34,015 per kg and weekly-based delivery by Rs 225 to Rs 34,025 per kg. Silver coins also spurted by Rs 1,000 to Rs 49,000 for buying and Rs 50,000 for selling of 100 pieces.



Crude Oil
On the MCX, oil prices declined by 11.1 percent to close at Rs.1996 per barrel.
Global crude benchmark Brent broke below $30 a barrel, its lowest since 2004, for a second straight day before rebounding. It also settled off the day's highs, after the U.S. State Department indicated a key Iranian nuclear reactor had been destroyed, as per conditions for lifting sanctions against Tehran's oil exports. U.S. government data showing builds in crude, gasoline and diesel supplies augmented fears that demand will stagnate as global markets contend with oversupply. Concerns about U.S. economic uncertainty also amplified the declines, the Standard and Poors 500 index dipped below 1900 for the first time since early October. Prices declined extending a selloff that amid deepening concerns about fragile Chinese demand and the absence of output restraint


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