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Weekly Commodity: Gold rose to a 5-month high as investors sought safe-haven assets

SMC | 20 Apr, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary


In the week gone by, there were major announcements and geopolitical tensions, which kept market in jittery and the market ignored some positive data. CRB couldn't stay on higher side and bullion sparked again on safe haven demand. Gold edged up as rising political tensions over North Korea and the Middle East buoyed safe-haven demand for the metal, crossed the $1285 level in comex. Gold rose to a 5-month high as investors sought safe-haven assets after the United States launched cruise missiles on a Syrian air base, potentially escalating tensions with Syrian allies Russia and Iran amid lower dollar index. Silver closed near $18.50. The dollar fell as concerns over tensions with North Korea and Syria weighed on U.S. Treasury yields and offset expectations of U.S. interest rate hikes. Crude gained for straight three week, whereas natural gas closed the week on profit booking from the higher side after a three week continuous rally. Crude prices have rallied some 12% in less than two weeks, which has been the longest winning streak since last August. Support has come from geopolitical concerns over Syria, and news that Libyan production has been cut again, with the closing of a major field, while Russia has said recently is production cuts would top 250k bpd by the end of April. Additional U.S. shale production to the market, with Baker-Hughes last week reporting the 12th straight week of increased oil rigs in operation is capping the upside. Most of the base metals closed down. Copper prices moved down on concerns about oversupply continued to drag as the world's top two copper mines look to recover from disruptions. Edible oil and oil seeds counter performed strong. Amid pick up in domestic demand as against restricted supplies from producing regions, refined soya oil prices were up. CPO was up in Indian market though traded in red zone in international market. A recovery in the production of palm oil has put pressure on prices, causing it to fall to a six-month low. CPO output in Malaysia grew 18% year-on-year. Seasonally, CPO production in Malaysia peaks in August-October and starts to trend lower in the November-December period. Jeera prices rebounded over rising tensions in West Asia, especially after the recent US airstrike on Syria, the second largest producer of the spice.

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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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