E
MCX - WEEKLY NEWS LETTERS
INTERNATIONAL NEWS
✍ Bullion
Silver market witnessed a volatile movement on Previous week wherein both Comex and MCX silver futures staged a strong rally after bombings in Brussles. However, the market failed to sustain its gains because of bearish fundamental factors, hence, it eroded the gains to end the day on a flat note. As of Wednesday morning, Comex silver futures for May delivery are trading at $15.82 per ounce, down by 0.41%. Gold futures closed little changed in the domestic market as investors and speculators stuck to a cautious stance after a top US Federal Reserve official signaled the possibility of an interest rate hike in the near-term, dimming the lure for the yellow metal as a store of value. St. Louis Fed President James Bullard said that another US rate hike may be round the corner, possibly in the Fed’s upcoming meet in April or June. Fed officials last week sounded more upbeat over the prospects of the US economy even in the wake of continued global uncertainty. Gold finished lower in the overseas market as talks of a renewed Fed rate hike in the near-term lifted the dollar, dampening the appeal of the precious metal as an alternative asset. Gold may fall today after an upward revision in US fourth quarter growth to 1.4 per cent annualized pace from 1 per cent earlier signaled more optimism over the strength in the world’s biggest economy, bolstering the case for further rate tightening. At the MCX, Gold futures for April 2016 contract closed at Rs 28,599 per 10 gram, down by 0.02 per cent after opening at Rs 28,500, against the previous closing price of Rs 28,604. It touched the intra-day low of Rs 28,450.the weakness in gold market was due to dovish outlook on Fed interest rate hike in 2016. The manufacturing PMI data from US released on Tuesday showed an improvement in US manufacturing sector thereby putting pressure on the gold market. Similarly, MCX gold futures also eroded the gains, however, ended slightly on a positive note

✍ Base Metal
Base metals prices declined sharply following indications of a hawkish stance by the US Fed and the possibility of a decision on the interest rate hikes in its scheduled meeting in April. If true, it would be a complete reversal in the Fed’s earlier dovish stance, with slower rise in interest rates. The base metals market took the hawkish indication as a surprise as the US economy continued to show turbulence with frequent change in performance. In fact, the latest data from the Commerce Department showed stronger US economic growth in the fourth quarter of 2015 than previously estimated. This triggered a broad-based sell-off in metals on a stronger US dollar against major global currencies as investors diverted their funds to US treasury for better returns. The extended weekend also helped bearish sentiment in base metals as trading corporates squared off their positions to show healthy books for the quarter ended March 2016. “Base metals prices declined sharply on Thursday due to the hawkish stance taken by the US Fed on the economy prompting thereby interest rate revisions in its meeting scheduled in April, the stance which seemed deferred earlier. That has helped strengthened the US dollar against major global currencies," said Naveen Mathur, Associate Director (Commodities and Currencies), Angel Broking. At LME, nickel showed some slight recovery, while copper remained flat. Aluminum and Lead shared equal percentage of losses. At MCX Nickel was the sole metal under green zone yesterday. With signals from the above mentioned two Fed Presidents about rising interest rates in April/ June meetings, dollar gained some momentum while the denominated commodities showed some slump. Apart from this, new aluminum plant is expected to start by next year by the UAE and Singapore firms. Clive Palmer’s Queensland Nickel Refinery can face fines up to $2.60 million due to rising levels of ammonia in nearby waterways.
Zinc futures tumbled by more than 2 per cent in the domestic market as investors and speculators exited positions in the industrial metal amid weak physical demand for zinc in the domestic spot market. Further, a decline in US business investment signaled a bleak demand outlook for industrial metals. Orders for US non-military goods excluding aircraft, a proxy for future business investment, fell by 1.8 per cent in February 2016 over the previous month. At the MCX, Zinc futures for March 2016 contract closed at Rs 119.65 per kg, down by 2.09 per cent after opening at Rs 121.45, against the previous closing price of Rs 122.2. It touched the intra-day low of Rs 118.85.

✍ Energy
Natural gas futures fell in the domestic market as investors and speculators exited positions in the energy commodity after a rise in US storage levels signaled weak demand for the fuel in the world’s biggest natural gas consumer.The EIA reported that US gas supplies climbed by 15 billion cubic feet to 2.493 trillion cubic feet in the week ended March 18, 2016. The five-average average for the same week was a withdrawal of 24 billion cubic feet while stockpiles fell by 4 billion cubic feet a year ago. At the MCX, Natural Gas futures for March 2016 contract closed at Rs 120.8 per mmBtu, down by 0.90 per cent, after opening at Rs 121.2, against the previous closing price of Rs 121.9. It touched an intra day low of Rs 119.
Crude oil prices Previous week showed mixed moves as the expectations from the inventory data suggests further swelling up of crude stocks and downfall in products side inventory levels. With better demand in the market for products side, especially for gasoline, inventory levels are getting hit as the output is also less due to seasonal maintenance. Gasoline prices in the United States showed huge recovery as more drivers are hitting road before the summer driving season. EIA has also forecasted that this year, gasoline consumption would be near their previous peak of 2007. Prices today are down during early morning session as the API inventory data showed massive crude stocks buildup



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