Commodity Research Report Ways2Capital 27 June 2016


Posted June 27, 2016 by ways2capital

Bullion extended losses after U.S. Federal Reserve Chair Janet Yellen said global risks and a U.S. hiring slowdown warrant a cautious approach to raising interest rates. However, surprising results from

 
MCX - WEEKLY NEWS LETTERS
✍ BULLION
Bullion extended losses after U.S. Federal Reserve Chair Janet Yellen said global risks and a U.S. hiring slowdown warrant a cautious approach to raising interest rates. However, surprising results from Brexit that it will leave the EU block led the rally in gold prices last week.Over the week, prices fell to a two-week low as the last sweep of opinion polls before Britain's referendum on EU membership began gave the campaign to stay in the bloc a slight edge. Polls by ComRes, conducted for the Daily Mail newspaper and ITV television, and by YouGov for The Times newspaper in London, showed a last-minute rise in support for Britain to remain in the EU.Gold soared to its highest in more than two years after Britain delivered a shock vote to leave the European Union, sending investors scurrying for protection in bullion and other assets perceived as lower risk. In sterling terms, gold delivered double-digit percentage gains to top 1,000 pounds an ounce for the first time in more than three years, rallying as much as 21 percent in early trade, while euro-priced gold rose as much as 13 percent. CME raises COMEX 100 gold futures (GC) initial margins for speculators by 22.2 percent to $6,050 per contract from $4,950. COMEX gold futures volume exceeded 576,850 contracts, their second highest on record. This represents 57.7 million ounces worth about $76.3 billion. Britain's vote to leave the European Union forced the resignation of Prime Minister David Cameron and dealt the biggest blow to the European project of greater unity since World War Two. The Bank of England said it would take all necessary steps to shield Britain's economy from the shock decision, having "undertaken extensive contingency planning" for the vote. Gold dealers in London reported surging demand for coins and bars, with some saying stocks were tight, after a shock vote for Britain to leave the European Union sent financial markets into meltdown and drove the pound lower. Gold sales in London picked up earlier this month after polls first began to suggest that the Leave campaign had edged into the lead.
The U.K. voted by a substantial margin to leave the EU in a landmark referendum, with the Leave side winning 52% of the vote, against 48% to remain.Silver settled up 2.92% at 42392 as the U.K.’s surprise decision to leave the European Union in a landmark referendum continued to boost safe-haven demand.The Bank of England said Friday it would take all necessary steps to secure monetary and financial stability after the shock Brexit result.The Bank of England is monitoring developments closely," it said in a statement. "It has undertaken extensive contingency planning and is working closely with HM Treasury, other domestic authorities and overseas central banks." U.S. orders for long lasting manufactured goods fell more than forecast in May, while core orders unexpectedly declined, according to official data showed. Total durable goods orders, which include transportation items, fell 2.2% last month, the Commerce Department said, compared to expectations for an decline of 0.5%. April's orders were revised down to show an increase of 3.3% from a previously reported 3.4% advance. Durable goods are typically bulky or heavy manufactured products designed to last at least three years.

✍ ENERGY
Crude prices had settled 2 percent higher after a volatile session, with investors less worried about prospects for the global economy on the growing view that Britain would remain in the EU. The world's largest oil exporter and OPEC heavyweight produced 10.262 million bpd in April, compared with 10.224 million bpd a month earlier, the data showed. Potentially adding to supply, Iran has increased its crude exports capacity at its main terminal on Kharg Island to allow eight tankers to load simultaneously. Brexit referendum came out with Britain leaving the EU which resulted in the fall in oil prices last Friday by more than 6 percent. Financial markets have been worried for months about what a British exit from the European Union, dubbed widely as 'Brexit,' would mean for Europe's future, but were clearly not fully factoring in the risk of a 'leave' vote. As the Leave campaign took a resounding lead in the wee hours of Friday morning, both the international and U.S. benchmarks of crude tumbled more than 6%, falling to their lowest levels since mid-May. With the considerable losses, the front month contract for crude erased all of their gains from the last week when they surged more than $4 a barrel. U.K. Prime Minister David Cameron announced intentions to step down by October after polls showed that the Exit camp prevailed by a 52-48% margin. Russian Energy Ministry expects oil price volatility to increase in the short term after Britain's vote in favor of leaving the European Union, RIA news agency quoted Russian First Deputy Energy Minister Alexei Texler as saying on Friday. Elsewhere, oil services firm Baker Hughes said in its weekly rig count report that U.S. oil rigs fell by seven to 330, marking its first decline in four weeks

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Last Updated June 27, 2016