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Weekly Commodity: Prices were broadly on weaker side

SMC | 14 Mar, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary


Commodities prices were broadly on weaker side this week. Strong Greenback, poor economic releases amid technical sell off dragged down the commodities prices. The U.S. dollar index hit fresh three-month highs after stronger than expected jobs data fueled expectations for a Federal Reserve interest rate hike. Gold prices inched down to the lowest level in five weeks on Thursday, pressured by an uptick in the dollar ahead of US non-farm payrolls data on Friday. Strong chances of interest rate hike by Fed stole the safe haven buying of Bullion. Silver prices fell like nine pin and broke the 40600 level. Furthermore weak trend overseas and low demand from jewellers also pressurized the prices. Silver prices are down 7% from the 2017 closing high of $18.49. The price of U.S. crude oil has dipped below $50 for the first time since December as a global supply glut persists despite production cuts by big exporters. U.S. commercial natural gas supplies have risen for nine straight weeks, reaching a record 528.4 million barrels last week, according to the U.S. Energy Information Administration. In MCX, price slipped below 3350 levels. U.S. drilling has picked up, with producers planning to expand crude production in North Dakota, Oklahoma and other shale regions. Shares of oil companies have sagged in recent weeks as analysts' cut their earnings predictions for the industry. On the flip side, crude prices recovered again this week on lower level buying amid cut in inventory in US. The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 68 billion cubic feet for the week ending March 3. Demand for natural gas is expected to be low over most of the country for the next few days. In base metals, it was only lead, which swam against the wind and closed up, rest of the metals were bearish on strong Greenback and poor outcome of economic releases.

In agri counter, oil seeds and edible oil played weak on bearish cues from international market. Soybean prices edged down on ample South America output. Mustard oil prices fell further as farmers have increased cultivation by 9% and output is expected to rise 16% to 79.12 lakh tonnes, according to government estimates. In spices counter, only jeera recovered, rest of the spices traded weak.

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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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