MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ PRECIOUS METAL
✍ Gold
Gold slipped on Thursday, giving back some of its overnight gains, in choppy trading after the Federal Reserve raised US interest rates for the first time in nearly a decade. The US central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.Gold has slumped nearly 10% this year, largely on uncertainty around the timing of the US rate hike and on fears that higher rates would hit demand for the non-interest-paying precious metal. Though the Fed decision removes an overhang for gold prices, the focus now shifts to the central bank's pace of future rate increases. Spot gold dipped 0.2% to $1,070.70 an ounce by 0037 GMT. The metal had rallied before the Fed decision on Wednesday and managed to hold on to most gains post the central bank statement, ending the day up 1.2%. US gold fell 0.6% to $1,070.50, following a 1.4 gain in the previous session. "Gold has been extraordinarily sensitive to perceived changes in monetary policy for many months," said HSBC analyst James Steel. "The rate rise may finally clear the deck and remove rate-related uncertainty from the bullion market." The Fed action leaves gold positioned for some gains, largely from short covering, but only modestly, he said.Investors had increased their short positions on gold to record levels this month, although they have since edged back from that peak. The dollar jumped nearly 1% against a basket of major currencies on Thursday, a factor that could limit any short covering gains. The US central bank made clear the rate hike was a tentative beginning to a "gradual" tightening cycle, and that in deciding its next move it would put a premium on monitoring inflation, which remains mired below target. Wall Street's top banks expect the Fed to next raise US rates in the first quarter of next year, according to a Reuters poll. The rate forecasts, or dot points, from Fed members were a little higher than many expected with 100 basis points of hikes pencilled in for next year and a terminal rate of 3.5%. The divergence between the Fed forecasts and the market could hurt gold prices as investors begin to align their views with the central bank.


✍ Silver
Amid a weakening trend overseas, silver prices tumbled Rs 392 to Rs 34,008 per kg in futures trade today as speculators cut their holdings. Silver for delivery in March next year was trading sharply lower by Rs 392, or 1.14%, at Rs 34,008 per kg in a business turnover of 812 lots in futures trading at Multi Commodity Exchange (MCX).On similar lines, the white metal for delivery in far-month May slumped Rs 396, or 1.14%, at Rs 34,401 per kg, with a business turnover of 23 lots. In the international market, silver traded 0.92% lower at $14.04 an ounce in Singapore. Market analysts said a weak trend in precious metals in global markets after the US Federal Reserve ended the zero-interest-rate era and flagged a quartet of increases in 2016, boosting the dollar and reducing demand for the precious metals as an alternate.

✍ Crude Oil
Crude prices sank deeper in Asian trading today after the US oil benchmark closed at its lowest level since February 2009 on worsening oversupply concerns and a stronger dollar. At around 0220 GMT, West Texas Intermediate (WTI) for January delivery was trading at $34.77 per barrel, 18 cents off its close of $34.95 in New York.European benchmark Brent crude for February was down nine cents to $36.97. Oil is trading near levels last seen at the height of the last global financial crisis as producers including the OPEC group continue pumping despite depressed prices and anemic global demand. Adding to the commodity's woes is the US Federal Reserve's decision on Wednesday to raise benchmark interest rates for the first time in nine years, boosting the dollar and thus making crude more expensive for buyers with weaker currencies. "WTI sinking further below $35 in the morning is likely the result of the strengthening dollar," Daniel Ang, investment analyst at Phillip Futures in Singapore, said. "In addition to this, Brent's January 2016 contract has expired, which is causing spread traders to close off their WTI January 2016 contract positions."
Crude futures were mixed in Asian trading on Friday as fresh signs of inventory building and the Federal Reserve's rate hike this week kept prices under pressure amid a global glut of oil that shows no sign of abating. U.S. crude's West Texas Intermediate (WTI) futures were down 13 cents at $34.82 a barrel by 0350 GMT. The contract fell 1.6 percent to $34.95 a barrel on Thursday. Brent was up by 3 cents at $37.09 a barrel. It fell 33 cents to $37.06 a barrel on Thursday. "It's the usual story. We have plenty of oil and oil demand is weak," said Avtar Sandu, Senior Commodities Manager, Phillip Futures in Singapore. "Everything is bearish, there is a bottom but for oil we don't see anything yet." Both contracts are on track to post a third week of losses, with U.S. crude down 2.2 percent and Brent off by 2.1 percent. Sandu said the bears won't be satisfied till they test lows reached during the global financial crisis of $32.40 for WTI and $36.20 for Brent in December 2008. "That's the first target the bears are gunning for," Sandu said. "I think they will test those and once they hit them, see whether they can press below $30 for WTI." Market intelligence company Genscape reported an inventory increase of 1.4 million barrels at the Cushing, Oklahoma delivery hub for WTI futures, traders who saw the data said on Thursday. That came a day after the U.S. Energy Information Administration (EIA) said crude stockpiles across the United States rose by 4.8 million barrels last week, compared with analysts expectations for a draw.

✍ Copper
Copper prices were up 1.49% to Rs 309.10 per kg in futures trading today as speculators raised their bets, tracking a firm trend overseas. Besides, pick-up in demand from consuming industries supported the upside.At the Multi Commodity Exchange, copper for delivery in February month shot up by Rs 4.55, or 1.49% to Rs 309.10 per kg in business turnover of 12,249 lots. Likewise, the metal for delivery in far-month April contracts traded higher by Rs 4.25, or 1.37% to Rs 313.35 per kg in 265 lots.Market analysts attributed the rise in copper futures to a firming trend in base metals in global markets as Chinese copper smelters may build inventories to support prices after they announced plans to cut production next year.Meanwhile, copper increased 1.5% at the London Metal Exchange.

✍ Aluminium
Aluminium prices were down 0.45% to Rs 100 per kg in futures trade today as investors offloaded positions amid weak global cues and muted demand at spot markets. At the Multi Commodity Exchange, aluminium for delivery in January next year eased by 45 paise, or 0.45%, to Rs 100 per kg, in a business turnover of four lots. Similarly, the metal for delivery this month was trading lower by 40 paise, or 0.40%, at Rs 99.15 per kg in 185 lots. Market men said the fall in aluminium prices at futures trade was mostly in tune with a weak trend at London Metal Exchange as industrial metals retreated as investors refocused on poor demand, following gains made in the wake of the US Federal Reserve's increase in rates for the first time in nearly a decade.

✍ Zinc
Zinc futures fell by 0.65% to Rs 99.95 per kg today as speculators indulged in reducing positions after industrial metals retreated in global market. Zinc for delivery in December shed 65 paise, or 0.65%, to Rs 99.95 per kg at the Multi Commodity Exchange. It clocked a business turnover of 359 lots. Likewise, the metal for delivery in January softened by 40 paise, or 0.39%, to Rs 101.15 per kg in 11 lots. Analysts attributed fall in zinc futures to a weak trend at the London Metal Exchange (LME).

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