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Weekly Commodity: Bullion counter continued its bearish momentum in the week gone-by

SMC | 13 Dec, 2016  | Follow Author | Add to my Favourites 
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Weekly Commentary


In the week gone by, Bullion counter continued its bearish momentum as stronger greenback and fear of rise in US interest rates kept the prices under pressure. The European Central Bank trimmed back its asset buys in a surprise move but promised protracted stimulus to aid a still fragile economic recovery, and dismissed any talk of tapering the programme away. Silver tried to stabilize near current levels and lower level buying was seen. In base metal pack, all base metals ended the week on a flat note while aluminum ended in green. China's imports of commodities surged unexpectedly last month putting the world's second-largest economy on track to set records for shipments of iron ore, coal even as concerns linger about slowing economic growth. The rise in copper imports reflected in part a rise in Shanghai Futures Exchange inventories and stronger demand from the Chinese power and construction sectors. In the energy counter, Crude oil traded on a volatile path and natural gas extended last week bullish momentum on weather concerns. Meanwhile OPEC President Mohammed al-Sada, speaking at the Nov. 30 news conference after OPEC finalized its output reduction, was confident that non-OPEC would deliver the 600,000 bpd. The U.S. Energy Information Administration expects U.S. crude oil production for 2016 and 2017 to fall by less than previously expected. Saudi Arabia will supply full contracted volumes of crude oil to at least four Asian buyers in January 2017 and will allocate extra volumes to at least two, despite commitments to cut production in an OPEC deal. According to the U.S. Energy Information Administration “U.S. crude stockpiles fell in penultimate week despite a hefty build at the Cushing, Oklahoma hub while gasoline and distillate inventories rose as refining rates picked up”

On the agri counters, only turmeric & palm oil managed to close in green. On the flip side, jeera prices slipped the most as sentiments turned bearish because the sowing made a good progress. Wheat prices saw a steep fall as govt. scrapped its 10% import duty. In oilseeds, apart from edible oil, the counter of soybean & mustard seed witnessed a decline on account of higher supplies & limited offtake from crushers.

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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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