Crude oil futures ended in the red in the domestic market on Thursday as
investors and speculators exited positions in the energy commodity tracking a weak trend in the overseas market as a sixth straight weekly rise in US crude oil stockpiles which near the high level in atleast 80 years signaled concerns over a worsening global supply glut.US crude oil supplies climbed by 2.8 million barrels to 482.8 million barrels in the week ended October 30, 2015, the EIA reported this week.A stronger dollar also curbed the lure for oil as an alternative asset. Stronger dollar makes oil more Costly for those holding other currencies, thus cutting demand for the fuel.The dollar spiked after Fed Chair Janet Yellen signaled that loaning costs may be raised before the year ends if economic data continues to remain robust.
Meanwhile, the number of Americans who filed for unemployment insurance benefits hit a five-week high, up 16,000 to 276,000 in the week October 31, 2015. Despite the spike in claims last week, analysts pointed out that the labour market in the US remains at healthy levels, providing the grounding for an interest rate lift-off next month.Oil may rebound today as recent sharp losses offer good bargain buying opportunity in the fuel at existing levels.
Crude oil prices edged up on Friday after falling over 2 percent the previous session, with analysts saying oversupply and a strong dollar would continue to weigh on fuel markets. US crude futures were trading at USD 45.46 a barrel at 0433 GMT, up 26 cents from their last settlement, while Brent crude rose 27 cents to USD 48.25 a barrel, but the gains followed steep falls the previous day on the back of climbing US crude inventories. At the MCX, Crude oil forthcoming, for the Nov 2015 contract, closed at Rs 3,039 per barrel, down by 0.33 per cent, after starting at Rs 3,065, against the previous ending price of Rs 3,049. It touched an intraday low of Rs 3,015.
Gold futures logged modest gains in the Local Domestic market on Thursday as investors and speculators booked fresh positions in the precious metal as a weaker growth outlook in the 19-member Euro area economy buoyed bets of a further stimulus firepower from the European Central Bank (ECB), bolstering the appeal of Gold, a hedge against the inflationary risk of monetary stimulus.
Mario Draghi, the ECB President said that the Frankfurt-based central bank will consider how to step up its stimulus program if it feels that the monetary easing measures it has undertaken thus far are inadequate to help the region’s economy return to price stability and solid growth. The EU on Thursday cut the economic growth estimate for the Euro area to 1.8 per cent in 2016 from an earlier 1.9 per cent amidst a global slowdown.
However, the gains in the yellow metal were curbed by renewed worries over a US rate hike in December which curbed the appeal of Gold as a store of value while bolstering the dollar, Gold’s nemesis. A stronger dollar makes Gold more expensive for those holding other currencies, thus dimming Gold’s demand as an alternative asset. Traders awaited the US jobs data set for release later on Friday which will offer cues over the health of the labour market in the world’s biggest economy, and perhaps dictate whether the US Federal Reserve will raise interest rates in December. American employers probably added 180,000 jobs in October, up from 142,000 in September, analysts’ surveys showed.
A pickup in job growth would lay the ground for policy tightening next month, with most officials from the US Federal Reserve stressing this week that the case for a rate lift-off is very much data dependent. Federal Reserve Bank of Atlanta President said that continued improvement in the US economy may necessitate a rate hike “soon”.Gold may trade on a cautious note today ahead of US jobs data. At the MCX, Gold futures for December 2015 contract closed at Rs 25,841 per 10 gram, up by 0.27 per % after opening at Rs 25,819, against the Befored closing price of Rs 25,771. It touched the intra-day high of Rs 25,922.
Gold languished near an eight-week low on Friday and was set to post its biggest weekly drop since July as investors positioned themselves for a possible US rate hike this year, pulling money out of bullion funds. Market participants are now waiting for the US nonfarm payrolls report due later in the day for indications on the strength of the economy and how it would affect the Federal Reserve's monetary policy. Spot gold had ticked up 0.4 percent to USD 1,107.60 an ounce by 0332 GMT, not far from USD 1,102.35 hit in the previous session, the lowest since Sept. 11. The metal has lost 3 percent for the week, the sharpest slide since the week ended July 24. "Gold continues to trend lower with rising bets on a Fed rate hike in December. The recent trend looks entrenched with sentiment weakening in recent days, Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, tumbled to 671.77 tonnes, the lowest since mid-August. On Thursday alone, the fund saw outflows of 8.34 tonnes, the biggest daily drop since July 17. Fed Chair Janet Yellen said on Wednesday that a rise in rates in December was a "live possibility" if justified by upcoming economic data. The Fed in its October policy statement was deliberately trying to convince investors of a possible December interest rate hike, and was successful in doing so, Atlanta Fed President Dennis Lockhart said on Thursday. Earlier, after the US central bank's September meeting, investors believed the Fed would delay the first US rate hike in nearly a decade to next year on global growth concerns. Gold as a non-interest-paying asset could see demand take a hit from higher rates. Solid payrolls data later in the session could seal the case for a December rate hike. According to a survey of economists, nonfarm payrolls probably increased 180,000, well above the 139,000 jobs per month average for August and September. "The USD 1,100 handle is the key figure on the downside whilst a spike back above USD 1,110 could signal a technical turnaround or at least a consolidation," said MKS Group trader James Gardiner. Among other precious metals, silver and platinum were headed for their third straight weekly declines. With a 10-percent slide, palladium was on track for its worst week since September 2011, hurt by sharp outflows from exchange traded funds.
Gold languishes at 1-month low; govt launches gold-schemes Gold remained under immense selling pressure for the fifth consecutive day at the domestic bullion market here today due to sluggish offtake by stockists and retailers in the face of bearish overseas sentiment. Elsewhere, silver also plummeted sharply following frantic unwinding by speculative traders. Meanwhile Prime Minister Narendra Modi today launched three ambitious schemes to reduce the physical demand for gold and fish out 20,000 tonnes of the precious metal worth USD 800 billion lying idle with households. The Gold Monetisation Scheme (GMS), 2015 will offer option to resident Indians to deposit their precious metal and earn an interest of up to 2.5 percent; while under the Sovereign Gold Bonds Scheme, investors can earn an interest rate of 2.75 percent per annum by buying paper bonds. Modi also unveiled the first ever Indian gold coin & bullion, bearing national emblem Ashok Chakra on one side and Mahatma Gandhi's image engraved on the other side. Standard gold (99.5 purity) declined by Rs 75 to end at Rs 25,875 per 10 grams from overnight closing level of Rs 25,950. Pure gold (99.9 purity) also dropped by a similar margin to settle at Rs 26,025 per 10 grams compared to Rs 26,100 on Wednesday. Silver (.999 fineness) plunged by Rs 450 per kg to finish at Rs 36,000 against Rs 36,450 earlier. On the global front, the yellow-metal continued its downward spiral after Fed Chair Janet Yellen reiterated that a December rate lift-off was possible following robust US macro data as well as a stronger dollar. Spot was trading marginally lower at USD 1,110 an ounce in early European session, while silver quoted little changed at USD 15.03 an ounce.
Natural Gas futures soared by nearly 5 % in the domestic market on Thursday as investors and speculators booked Newly positions in the energy commodity tracking a firm trend in the overseas market as a smaller than expected stockpile injection last week signaled a pickup in demand for the heating fuel at the start of the winter season in the US, the world’s biggest fuel consumer.
The EIA said that US gas supplies climbed by 52 billion cubic feet to 3.929 trillion cubic feet in the week ended October 30, 2015. Analysts were expecting an injection of 60 billion cubic feet while stockpiles had risen by 63 billion cubic feet a week ago. Last week’s supply rise was below the 91 billion cubic feet build in the same period a year ago and the 68 billion cubic feet five-year average increase.
At the MCX, Natural Gas futures for Nov 2015 contract closed at Rs 157.1 per mmBtu, up by 4.9 per cent, after Starting at Rs 149.7, against the previous ending price of Rs 149.7. It touched an intra-day high of Rs 157.7.
4 - Zinc extends bearish ride on weak German data
Zinc futures extended losses in the local domestic market on Thursday as investors and speculators exited positions in the industrial metal amid weak demand for zinc in the domestic spot market. A slump in factory orders in Germany in Sept signaled a faltering recovery in Europe’s biggest economy, darkening the demand outlook for the metal. German factory orders slipped 1.7 % in Sept from the previous month, when they declined 1.8 per cent, the Economy Ministry in Berlin reported on Thursday.
Meanwhile, a reduction in Euro area growth forecasts also clouded the metal’s demand prospects as the EU cut the economic growth estimate for the Euro area to 1.8 per cent in 2016 from an earlier 1.9 per cent. At the MCX, Zinc futures for November 2015 contract closed at Rs 108.75 per 1 kg, down by 0.41 per cent after starting at Rs 109.8, against the previous ending price of Rs 109.2. It touched the intra-day low of Rs 108.2.
5 - Chana Ends Higher in Strong Demand
Chana prices closed higher 3.09 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as the traders enlarged their holdings in the commodity on account of the good demand in the market. At the NCDEX, chana futures for November 2015 contract closed at Rs. 5,165 per quintal, up by 3.09 per cent, after opening at Rs. 4,980 against the previous closing price of Rs. 5,010. It touched the intra-day high of Rs. 5,206. Moreover, the restricted arrivals of the commodity in the market due to lower estimated output also influenced the chana prices.
India is the largest manufacturer of chickpea followed by Pakistan, Turkey and Iran. India produces around 6 to 8 million tonnes and contributes around 70 % of the total world production.
6 - Jeera prices closed lower by 0.38 per cent on Thursday
Jeera prices closed lower by 0.38 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) on account of a surge in the supply from the producing regions in the midst of a decline in the export demand. At the NCDEX, jeera future for Nov 2015 contract closed at Rs. 15,600 per quintal, down by 0.38 per cent, after opening at Rs. 15,600 against the previous closing price of Rs. 15,660. It touched the intra-day low of Rs. 15,440.
Global output of Jeera is likely to be 2.2 lakh MT per year, of which India produces about 1.5 lakh MT per year.
India exports Jeera mainly to the US, Japan , UK, , Brazil, Singapore, Bangladesh,and many other countries. Other Major exporters are Syria and Turkey.
7 - Mustard Seed Ends Higher on Drop in Arrivals
Mustard seed prices closed higher by 0.57 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of the decline in the supply for the commodity in the major markets. At the NCDEX, mustard seed futures for November 2015 contract closed at Rs. 4,903 per quintal, up by 0.57 per cent, after opening at Rs. 3,874 against the previous closing price of Rs. 4,875. It touched the intra-day high of Rs. 4,935.
India produces 5.5 million MT to7 million MT annually and about 0.15 million MT is retained for sowing and direct consumption as seed which leaves about 4.8-5.1 million MT for crushing and extracting oil.
8- Barley prices closed lower by 1.16 per cent on Thursday
Barley prices closed lower by 1.16 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as the investors booked profits at the higher on account of the weak physical markets and also due to the fall in the demand from beer and cattle-feed makers. At the NCDEX, barley futures for November 2015 contract closed at Rs. 1,453 per quintal, down by 1.16 per cent, after opening at Rs. 1,465.5 against the previous closing price of Rs. 1,470. It touched the intra-day low of Rs. 1,450. Sentiment weakened further on account of a surge in the arrivals of the commodity along with the sluggish demand on higher levels.
Barley is a cereal grain derived from the annual grass Hordeum vulgare. This widely adaptable crop is popular in temperate areas where it is grown as a summer crop and tropical areas where it is sown as a winter crop.
9 - Maize prices closed Higher by 0.94 % on Thursday
Maize prices closed higher by 0.94 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of a rise in the demand from exporters and poultry industries. At the NCDEX, maize futures for November 2015 contract closed at Rs. 1,509 per quintal, up by 0.94 per cent, after opening at Rs. 1,503 against the previous closing price of Rs. 1,495. It touched the intra-day high of Rs. 1,516.
USA, China and Brazil are the top three maize producing countries in the world while the prominent exporters of maize are USA, Argentina and Brazil. Chief importers are Japan, EU, Malaysia, Taiwan, Indonesia etc.
10 - MCX Silverm November contract
MCX SILVERM November contract was trading at Rs 35420 down Rs 92, or 0.26 percent. The SILVERM rate touched an intraday high of Rs 35546 and an intraday low of Rs 35324. So far 8651 contracts have been traded. SILVERM prices have moved down Rs 7640, or 17.74 percent in the November series so far. MCX SILVERM February contract was trading at Rs 36060 down Rs 112, or 0.31 percent. The SILVERM rate touched an intraday high of Rs 36200 and an intraday low of Rs 35971. So far 567 contracts have been traded. SILVERM prices have moved down Rs 1441, or 3.84 percent in the February series so far.
