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Weekly Commodity: Big swings were noticed in the commodities

SMC | 30 May, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary          


The week gone by was full of risky events be it the news, China being degraded by Moody's, Manchester blast, Fed dovish tone as regards rate hike or OPEC meet. Big swings were noticed in the commodities. High volatility in currency made it jerkier. The dollar was on the defensive side after the Federal Reserve dialed down on some of the more hawkish policy expectations in the market, while the Euro edged back up towards a 6-1/2-month high. Gold gained for the third week after the U.S. Federal Reserve May meeting minutes overnight as dovish in tone on the timing of the next rate hike. Furthermore, explosion in the English city of Manchester also added safe haven buying in gold. Both gold and silver traded near their resistance of $1260 and $17.20 in COMEX. In MCX, silver was few points shy away from the mark of 40000 and gold closed near 28700. For crude, it was an important week. According to the authority, US inventories fell by 4.4 million barrels in the week till May 19, to a total 516.3 million barrels. It strengthened the prices. But the whole world was eying on OPEC meet. The oil price has dropped sharply on Thursday after deeper production cuts were ruled unnecessary by Saudi Arabia, which said major oil producers had agreed to extend output curbs for a further nine months. Crude closed below 3200 in MCX. Natural gas prices remained bearish on weak cues from the international market. In industrial metals; copper, zinc and aluminium closed up whereas nickel and lead prices dragged own. Copper held near its highest in three weeks as the dollar fell. The global world refined copper market showed a 93,000 tonnes surplus in February, compared with a 55,000 tonnes surplus in January, the International Copper Study Group (ICSG) said. Amid a weak trend in the global market and subdued domestic demand, nickel traded lower at Rs 588.90 per kg in futures trade as speculators reduced their bets.


In Agri, oil seeds and edible oil turned weak on bearish global cues. Palm oil production is growing and stocks are rebuilding so market participants are less concerned about the supply fundamentals of the commodity. Mentha oil prices rose in spot and futures as demand increased. However, traders are worried for further market trend as higher taxes under GST regime may impact menthe oil market.


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About SMC
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 IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



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