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Weekly Commodity: Dollar index appreciated after a sharp six week continuous fall

SMC | 13 Feb, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary


Many events & facts (both occurred at the same time) gave tough time to the investors; from strike issue in Escondida mines to Trump policy to INR appreciation. Dollar index appreciated after a sharp six week continuous fall and CRB closed down on selling pressure. Bullion counter traded firm as safe haven buying returned in this counter though appreciation in INR limited the upside. On Thursday, this counter shed some of its gain on a firmer dollar after US President Donald Trump promised a major tax announcement and as economic data boosted expectations of a US rate hike. Trump plans to announce the most ambitious tax reform plan since the Reagan era in the next few weeks. Gold breached the resistance of $1240 in comex and 29200 levels in MCX. Base metals moved in different direction. Zinc and aluminum prices edged up, copper was sideways with upside bias whereas lead and nickel closed the week on negative note. London copper climbed towards two month peaks, boosted by supply concerns after the world's top two mines said they planned to cut output due to strikes and permit delays. Workers are set to strike on Thursday at BHP Billiton Plc's Escondida copper mine after contract talks mediated by the Chilean government failed to reach a deal. The union has warned that a strike at the Chilean copper mine could be lengthy, potentially affecting global supplies of a metal used in everything from construction to telecommunications. A recent Chinese government document proposed that about a third of aluminum capacity in the provinces of Shandong, Henan, Hebei and Shanxi should be shut over the winter months and the same supported the aluminum prices. These provinces account for over 20% of global aluminum output. It strengthened aluminum prices. Energy counter traded weak. Crude moved down. Total commercial inventories in US are at 508.6 million barrels, above the upper limit for the season.

In agri counter, edible oil and oil seeds prices augmented in renewed buying, with the exception of soyabean. Guar counter shed some of its weekly loses on the news of expectation production decline by more than 30% in Rajasthan and improvement in guargum export. In spices; turmeric and cardamom prices edged higher while coriander prices took another dip. Cotton complex looked tired and moved down.


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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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