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Weekly Commodity: Volatile currencies kept the investors on toes throughout the week

SMC | 29 Nov, 2016  | Follow Author | Add to my Favourites 
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Weekly Commentary


CRB gathered strength on stunning rise in base metal and energy counter, though massive downside in bullion counter limited the upside whereas agri commodities performed mix. Volatile currencies kept the investors on toes throughout the week. The dollar firmed in after data suggesting a pickup in U.S. economic growth early in the fourth quarter increased chances of the Federal Reserve raising interest rates. Indian currency depreciated and touched the low of 68.87. In energy complex, robust trading was witnessed in both crude oil and natural gas. U.S. commercial crude inventories decreased by 1.3 million barrels last to last week, maintaining a total U.S. commercial crude inventory of 489 million barrels. Crude oil prices have fluctuated over the past several days, largely due to prospects that next week's OPEC meeting will result in a production cut. Natural gas prices closed at a three-week high on cold blast into the eastern US. It's also cooler than normal over the West. Bullion counter witnessed continuous three week fall as the dollar strengthened on growing expectations of Federal Reserve rate hike in December following positive U.S. economic data. On MCX, gold breached 28500 and silver broke the 41000 level. Scrap gold supplies in India, the world's secondbiggest consumer of bullion, are likely to halve this quarter as the cash crunch and falling prices make it difficult for consumers to liquidate their holdings. Furthermore, Donald Trump's U.S. presidential victory has spurred safe-haven buying of physical gold in Europe. Some heroic move was noticed in basemetal complex. London zinc hit an 8-year high as investors poured funds into metals in expectation of inflation in China and the United States, and on signs of growing strength in the U.S.manufacturing sector. Zinc touched themark of 189.90 last week on MCX. Copper saw massive upside in the prices as investors bet that rising energy prices would stoke inflation, increasing the allure of other commodities as a hedge for investors.

In agri counter, spices closed the week on strong note on domestic as well as international demand. Edible oilseed production for 2016-17 (kharif and rabi) is forecast to be an all-time high of 35 million tonnes (mt) on account of record soybean production of around 11 mt. Globally, too, the US department of agriculture (USDA), has forecast the total oilseed production to be 548 mt, a record. However, this is not reflected in lower edible oil prices because of acute shortage in palm oil supply, the largest and cheapest edible oil.

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About SMC
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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