MCX - WEEKLY NEWS LETTERS
✍ GLOBAL UPDATE
✍ INTERNATIONAL UPDATE
Oil futures edged up on Tuesday as the U.S. dollar backed off a two-week high hit the day before, although doubts that crude producers would agree next month to an output freeze continued to drag on prices. The U.S. dollar has retreated from Monday's peak as investors look ahead to jobs data this week that Federal Reserve Vice Chair Stanley Fischer has said will be important to whether the U.S. central bank raises interest rates soon. A weaker dollar makes oil purchases cheaper for buyers using others currencies, potentially spurring demand. Yet doubts of agreement in talks on an output freeze among members of the Organization of the Petroleum Exporting Countries continues to weigh on prices. "There's a feeling that the OPEC production freeze talks might result in something positive, but it's just talk," Brent crude futures were trading at $49.38 per barrel at 0505 GMT, up 12 cents from their previous close. U.S. West Texas Intermediate crude was up 17 cents at $ 47.15 a barrel. Saudi Arabian Energy Minister Khalid Al-Falih told Reuters last week he does not believe an intervention in oil markets is necessary since the "market is moving in the right direction".This was followed by the United Arab Emirates energy minister Suhail bin Mohammed al-Mazroui saying OPEC's current share of the oil market is "at a good level". As well, Iraq - which increased crude exports this month from its southern ports compared with July - will continue ramping up output, its oil minister said on Saturday.
Gold gave up early gains in Asia on Tuesday as the dollar gained further and data sets from Japan showed noted improvement as investors looked ahead to non farm payroll figures in the U.S. at the end of the week for a clearer view of a possible Fed rate hike this year. Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 0.06% to $1,326.255 a troy ounce. Silver futures on the Comex were nearly steady at $18.770 a troy ounce, while copper futures gained 0.29% to $ 2.090 a pound. In Japan, household spending fell 0.05% in July year-on-year, less than the 0.9% decline expected, and gained 2.5% month-on-month, beating the 1.1% increase seen. The unemployment rate fell to 3.0%, below the expected 3.1% level seen. Also in Japan, retail sales dipped 0.2% in July month-on-month, compared with a 0.9% drop expected. Overnight, gold prices held on to overnight losses in North American hours on Monday, trading at five-week lows after senior Federal Reserve officials indicated a U.S. interest rate increase was on the cards in the near term. Odds for an interest rate hike from the Federal Reserve in the coming months spiked after Fed Chair Janet Yellen said Friday that the case for an increase was strengthening, while Vice Chairman Stanley Fischer indicated a tightening is possible at the next review in September.
Gold gained in Asia on Tuesday as investors looked ahead to nonfarm payroll figures in the U.S. at the end of the week for a clearer view of a possible Fed rate hike this year. Gold for December delivery on the Comex division of the New York Mercantile Exchange edged up 0.07% to $ 1,328.05 a troy ounce. Silver futures on the Comex rose 0.49% to $ 18.860 a troy ounce, while copper futures gained 0.05% to $ 2.085 a pound. Overnight, gold prices held on to overnight losses in North American hours on Monday, trading at five-week lows after senior Federal Reserve officials indicated a U.S. interest rate increase was on the cards in the near term. Odds for an interest rate hike from the Federal Reserve in the coming months spiked after Fed Chair Janet Yellen said Friday that the case for an increase was strengthening, while Vice Chairman Stanley Fischer indicated a tightening is possible at the next review in September.
Crude rebounded slightly in Asia on Tuesday as investors took advantage of a sharp overnight fall ahead of U.S. industry estimates on stockpiles later in the day. Crude oil for October delivery on the New York Mercantile Exchange edged up 0.06% to $ 47.01 a barrel. The American Petroleum Institute will release its estimates of crude and refined product stock at the end of last week, while the U.S. Department of Energy reports more closely-watched data on Wednesday. Overnight, oil prices extended overnight losses during North American hours on Monday, falling almost 2% as a broadly stronger U.S. dollar and fading hopes of a production freeze weighed on sentiment. Meanwhile, on the ICE Futures Exchange in London, Brent oil for November delivery declined 74 cents, or 1.48%, to trade at $ 49.41 a barrel. Oil's losses came as the U.S. dollar climbed to a two-week high following hawkish comments from two top Federal Reserve officials that hinted at a potential U.S. interest rate hike as early as next month. Fed Chair Janet Yellen said Friday at a gathering of central bankers in Jackson Hole, Wyoming, that the case for an increase was strengthening, while Vice Chairman Stanley Fischer indicated a tightening is possible at the next review in September. An increase in U.S. interest rates tends to lift the dollar, which would make oil more expensive for traders who conduct business in other currencies. Meanwhile, chances that the upcoming meeting among major oil producers in late September would yield any action to reduce the global glut appeared minimal after Iran said it would only cooperate in talks to freeze output if fellow exporters recognized its right to fully regain market share.
U.S. natural gas futures rose for the seventh session in a row on Monday to hit the highest level in eight weeks as forecasts for warmer than normal temperatures across most parts of the continental U.S. in the days ahead boosted demand expectations for the cooling fuel. Natural gas for delivery in October on the New York Mercantile Exchange touched an intraday peak of $ 2.931 per million British thermal units, the most since July 5. It was last at $2.924 , up 1.1 cents, or 0.38%. Futures soared more than 11% last week as traders reacted to forecasts for scorching heat across most of the continental U.S. through September 5 and as traders eyed potential storm activity in the Gulf of Mexico. Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning. Meanwhile, U.S. storage levels remained in focus. Total gas in storage currently stands at 3.350 trillion cubic feet, according to the U.S. Energy Information Administration, 8.3% higher than levels at this time a year ago and 8.2% above the five-year average for this time of year. Some market analysts said persistent heat late into the season could push power generators to continue burning gas. Unless intense late-summer heat boosts demand from power plants, stockpiles could possibly test physical storage limits of 4.3 trillion cubic feet at the end of October.
✍ GOLD
Gold edged lower on Monday as the dollar got a boost after hawkish comments from Federal Reserve Chair Janet Yellen left the door open to a US interest rate hike as early as next month. The case for raising U.S. interest rates has strengthened in recent months due to improvements in the labor market and expectations for moderate economic growth, Fed Chair Janet Yellen said on Friday. Spot gold had dipped 0.21 per cent to $ 1,318.06 per ounce at 0614 GMT. The metal closed last week down 1.5 per cent. US gold futures fell 0.35 per cent to $1,321.20. "We think the pressure on gold will likely increase as we go into September, as participants are now more willing to bet on a rate hike given what they have gleaned from top Fed officials on Friday," INTL FCStone analyst Edward Meir said in a note.
Ever since the government announced a 10% import duty on gold and 15% on jewelry, jewelers had been looking for loopholes in free trade agreements which allows import of gold jewelry at 1% duty. This, too, was plugged in March when the government imposed countervailing duty on jewelry. However, jewellers seem to have finally found a route to avoid the high levies: they have started importing gold utensils like glass, spoons, tumblers and bowls at 1% duty which are later converted into bars to make jewelry. So far, the quantity of gold entered through this route is not alarming since importers are still testing the



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