Also, Qatar's Energy Minister and OPEC. President Mohammad bin Saleh al-Sada ... 255,000 in July, much higher than expec
Fundamental Report 9th Aug 2016 Bullion – Spot gold prices traded flat yesterday at $1335.1 per ounce as US payrolls data on Friday reignited speculation that the Federal Reserve could press ahead with interest rate hikes later this year. U.S. nonfarm payrolls increased by 255,000 jobs last month, the Labor Department said on Friday, up from an expectation of 180,000. However, Holdings of SPDR Gold Trust, the world's largest gold backed exchange-traded fund (ETF), saw their biggest one-day rise on Friday since late June. Also, the Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to 2nd Aug 2016 showed that investors have raised their net longs in gold by 10359 contracts to 267289 contracts. On the MCX, gold prices surged by 0.8% to close at Rs.31470 per 10 gms on Monday. Spot silver prices rose by 0.3% to close at $19.7 per barrel. The fall in silver prices is in line with gain ion base metals. However, strengthening dollar index capped sharp upside. On the MCX, silver prices gained 0.1% to close at Rs.46287 per kg.
Outlook On an intraday basis, we expect gold prices to trade sideways as wave of optimism in the global markets post US jobs data and recent Chinese inflation data will hurt the safe haven. Besides, BoE has cut interest rates besides buying 60 billion pounds of government debt.
Energy – WTI oil prices jumped by 2.9% on Monday to close at $42.8 per barrel as a Wall Street Journal report late last week said that OPEC countries such as Venezuela, Ecuador and Kuwait want to take another stab at cooperation between the 14-nation Organization of the Petroleum Exporting Countries and non-members such as Russia. Also, Qatar's Energy Minister and OPEC President Mohammad bin Saleh al-Sada said on Monday the oil market is on the path to rebalancing despite the recent decline in global oil prices, adding that OPEC was in continuous talks to stabilize the market. However, Market intelligence firm Genscape reported a build of more than 307,000 barrels at the Cushing, Oklahoma delivery hub for WTI futures in the week to Aug. 5 The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to 2nd Aug have cut their net longs in crude by 31031 contracts at 80302 contracts. On the MCX, oil prices rose by 3.8% to close at Rs.2891 per barrel.
Outlook On an intraday basis, we expect oil prices to trade sideways as recent talks of informal meeting of OPEC member countries to pare supply glut will be supportive. While on the other hand, U.S. oil rig count rose last week for a sixth week in a row. Also, investor sentiments remains weak as Hedge funds cut their bullish exposure to Brent to the smallest since January while paring positive bets on WTI to the least since February. Besides, the absolute crude inventories in the US stands at around 519 million barrels which is at its highest point at this time of the year further exerting downside pressure on oil prices.
Base Metals – LME base metals traded higher on rising risk appetite after strong NFP data from the US eased some global growth concerns. MCX base metals traded higher in line with international trends. LME Copper prices gained 0.4% on Monday to close at $4810/ton as Nonfarm payrolls in the U.S. rose by a seasonally adjusted 255,000 in July, much higher than expected, reviving hopes of macro economic recovery. Also, decline of 0.8% in LME stocks acted as a positive factor. However, sharp gains were capped as China's copper imports fell 14% to 360,000 tons in July from the previous month. Overall, China's imports fell 12.5% from a year earlier in July and exports fell 4.4 per cent, pointing to further economic weakness. MCX copper prices traded higher by 0.3% yesterday to close at Rs.320.7 per kg
Outlook LME Copper is currently trading higher by 0.6 percent at $4822.5/ton. Prices are likely to trade higher today as Chinese Producer prices extended their decline in July after a weak trade data yesterday, reiterating that more stimulus measures are needed to bolster the nation’s economy. Also, markets sentiments continue to be positive after US Nonfarm employers came in well above expectations, giving much needed respite to the global economy.
ECONOMICAL DATA Indicator Manufacturing Production m/m Goods Trade Balance Prelim Nonfarm Productivity q/q Prelim Unit Labor Costs q/q
Country UK UK US US
Time (IST) 2:00pm 2:00pm 6:00pm 6:00pm
Forecast 0.0% -9.6B 0.5% 1.8%
Previous 0.5% -9.9B 0.6% 4.5%
Impact High Medium Medium Medium
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