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Weekly Commodity: Gold prices jumped on strong global cues

SMC | 29 Mar, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary


Overall CRB moved down last week. The US Dollar edged lower against most of its major counterparts and Treasury bond yields declined as the priced-in Fed rate hike path continued to flatten. Gold prices jumped on strong global cues and increased buying by jewellers. Globally, gold prices rose to a three-week high as risk- averse investors dumped equities amid a weaker dollar and sought safe havens on growing doubts about US President Donald Trump's economic agenda. Silver prices strengthened too. Silver outperformed gold last year and continued to do so. In this calendar year so far, silver prices have gained by around 9.38% in the international markets and 2.69% in the domestic markets—higher than the 7.39% and 2% surge seen in the yellow metal, respectively. Oil prices recouped much of their losses after sliding to almost four-month lows on Wednesday after data showed U.S. crude inventories rising faster than expected, piling pressure on OPEC to extend output cuts beyond June. The Energy Information Administration (EIA) said U.S. inventories climbed almost 5 million barrels to 533.1 million last to last week, far outpacing forecasts of a 2.8 million-barrel build. In base metals, lead moved up on flood issue.

India wheat futures gained fifth straight session on Thursday due to report of duty hike on imported wheat supported by lower than expected supply of new crop. Additionally, supply of wheat has not yet gathered momentum as was anticipated due to adverse weather in few states followed by farmers doing registrations with FCI to sell their produce. Indian edible oil and oil seeds futures gained on robust buying interest at local bourse. Soybean seed was mainly supported by buying interest coupled with improving domestic demand of soymeal from poultry feed manufacturer. Mustard futures were mostly up on account of buying interest by traders and improving demand for mustard by-product is also supporting the market sentiment. Guar traded mix, guarseed closed up whereas guargum was down on profitbooking at the higher levels. Supplies were sufficient to cater domestic demand of sugar and hence futures traded weak. Cotton prices moved down on ample of supply. China State Reserve sold 71% at 10,900 tonnes out of the total quantity at 15,461 tonnes of cotton reserved in the first section of its auction on March 23.

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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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