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Weekly Commodity: After five week of continuous fall, CRB gained last week

SMC | 04 Jul, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary            


After five week of continuous fall, CRB gained last week. The gain should be attributed to the fall in dollar index rather improvement in economic indicators. In Comex, gold and silver closed the week in negative zone. Though, they recovered their weekly loss to some extent on fall in dollar index. Here in India, MCX gold and silver prices augmented. Depreciation in rupee resulted in more upside as compared to international gold and silver. Gold closed above 28600 whereas silver was just 1 point shy away from 38600 level. Gold edged higher as the US dollar weakened against other currencies on bets that central banks in Europe were preparing to scale back monetary stimulus, but the bullion's gains were capped by a surge in equities. After 5 week of continuous fall, we saw recovery in crude prices. Crude prices hit a 10-month low last to last week in the face of a mounting supply glut, but data indicating a fall in US production has bolstered markets last week. US crude output dropped 100,000 barrels per day (bpd) to 9.3 million bpd last week; the steepest weekly falls since July 2016. Furthermore, in recent weeks, funds have been unloading long speculative positions, reducing bets on higher prices, while brokerages including Goldman Sachs and Societe Generale have cut their 2017 forecasts for crude prices. Natural-gas prices turned higher as EIA reports smaller-thanexpected rise in U.S. supplies. Data from the U.S. Energy Information Administration Thursday showed that domestic supplies of natural gas rose by 46 billion cubic feet for the week ended June 23. Base metals extend gains. This was in sympathy with the short covering rally in the energy sector, which was given further momentum by a weaker dollar and bullish short-term technical. Wheat prices soared in the international market on the concerns of crop loss in the main wheat growing belts of the U.S due to hot and dry weather condition. But, here in India it further loses strength. Indian oil seed futures gained on short covering. Mustard seed futures also gained on short covering and traders are anticipating that spot prices of mustard seed may sustain at current level amid restricted farmer selling. There is rumor in the market that Indian government is likely to hike import duty on refined and crude vegetable oils, like palm and soy oil after the sharp drop in oilseed prices.

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SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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