MCX Gold Slips Even As Rupee Falls

Gold......

Domestic gold futures on Multi Commodity Exchange slipped today even though the Rupee appreciated and the international gold futures surged.

MCX October gold futures are trading down nearly Rs 20 at Rs 28038 per 10 grams extending yesterday’s losses of more after than 1%. The counter may find support near Rs 27900 and Rs 27750 levels.

The rupee today dropped by 28 paise to 60.68 in late morning deals on the back of a strengthening of the US currency overseas despite a recovery in the equity market. The rupee resumed lower at 60.70 per dollar as against the last closing level of 60.40 at the Interbank Foreign Exchange (Forex) market and dropped further to 60.84.

In the global market, a key gauge of the dollar's performance rose in the early trade, clawing back from multi-week lows suffered after the US Federal Reserve offered no clues as to when it plans to slow the pace of monetary stimulus.

A key gauge of the U.S. dollar’s performance rose on Thursday, clawing back from multi-week lows suffered after the U.S. Federal Reserve offered no clues as to when it plans to slow the pace of monetary stimulus.

The ICE dollar index, which tracks greenback’s movement against six rivals, rose to 81.715, up from 81.464 late Wednesday in North America. The euro on Thursday fell to $1.3272, down from $1.3332 on Wednesday, and the British pound declined to $1.5162 from $1.5248.

Policy decisions were due from both the European Central Bank and the Bank of England later Thursday. Improving economic data can bolster the view that the Fed is moving closer to slowing the pace of asset purchases. The monthly jobs report due Friday marks the last key piece of U.S. data for this week

International gold futures are trading up $ 4.9 at $ 1317.9 per ounce on the COMEX division of New York Mercantile Exchange. However the metal continued to face resistance near $1350 levels.

Source by Commodity Insights

Copper Rises Amid Supportive Cues From US And China

MCX Copper

futures continued to edge higher today, as global cues remained supportive. Asian stocks edged up on a decent uptick in US GDP yesterday and lack of any further taper talk from the US Federal Reserve also supported sentiments. Copper has been strained on worries posed by Chinese demand slowdown in last few days but witnessed a good recovery this week with three week lows around $3.04 auguring as good support levels. COMEX copper is up 0.37% at $3.130 per pound right now.

The US Federal Reserve stated yesterday that the information received since the Federal Open Market Committee met in June suggests that economic activity expanded at a modest pace during the first half of the year. Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has been strengthening, but mortgage rates have risen somewhat and fiscal policy is restraining economic growth. The US economy grew at an annualised rate of 1.7% in the second quarter of 2013, largely in line with the expectations after the recent surge in housing and consumer confidence data.

Meanwhile, today, China's manufacturing PMI improved slightly from 50.1 in June to 50.3 in July, but was still close to the neutral level of 50. The July reading indicates that the growth momentum of China's manufacturing sector has stayed weak, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. Ten of the twelve sub- indices were higher than their respective levels in the previous month. The rise in the headline PMI in July was largely due to the accelerating growth of output.

The US dollar has come off its six week low against the Euro and could gain further ahead of the monetary policy meetings of the ECB and the BOE. However, copper is placed rather well given the US GDP figures and Chinese manufacturing data. Unless the US dollar launches a massive rally, the metal should hold on. MCX Copper futures broke above Rs 420 per kg levels yesterday and currently trade at Rs 421.90, up Rs 0.35 per kg on the day.

Source by Commodity Insights

Economic Buzz: Japan's Manufacturing Growth Slows In July

Manufacturing sector growth in Japan moderated in July, a survey by Markit Economics showed Wednesday. The seasonally adjusted Markit/JMMA purchasing managers' index, that measures performance of the factory sector, fell to 50.7 in July from June's 28-month high of 52.3. PMI readings above 50 indicate expansion of the sector, while readings below 50 suggest contraction.

New orders increased for a fifth month running in July. New export orders also increased, but the pace of growth slowed since June. Both input and output prices increased in July, the survey found.

Source by Commodity Insights

Oil Inches Up Ahead Of Fed; Jobs

Oil.......

Crude oil futures inched up on value buying in the Asia electronic session today after the commodity tumbled to the lowest level in more than three weeks yesterday as traders awaited a reading on U.S. economic growth and an update on the Federal Reserve's stimulus measures.

Light, sweet crude futures for delivery in September are trading up 22 cents at $ 103.30 per barrel on the New York Mercantile Exchange. Light, sweet crude for September delivery settled $1.47, or 1.4%, lower at $103.08 a barrel its lowest finish since July 3.

In the economic front today, Japan's manufacturing grew at a slower pace this month, though still registered expansion, according to the Markit/JMMA Japan manufacturing Purchasing Managers' Index, released Wednesday. The headline index fell to 50.7 from June's 52.3, but remained above the 50 level -- the dividing line between growth and contraction -- for the fifth straight month.

Chinese stocks rose Wednesday after state media said the Communist Party's politburo vowed to keep economic growth steady in the second half of the year despite what it said were "extremely complicated domestic and international conditions." The Xinhua news report Tuesday carrying the statement didn't specify a growth level that it would defend. China's gross domestic product rose 7.7% in the first quarter and 7.5% in the second quarter.

The American Petroleum Institute reported a decline in U.S. inventories in its separate survey released late Tuesday. The industry group said crude stockpiles last week declined 740,000 barrels.

Investors are likely to remain cautious ahead of the second-quarter gross domestic product data and Fed statement Wednesday. The weekly crude stockpiles data is also due Wednesday. On Friday, traders will shift their focus to the Labor Department's closely watched nonfarm payrolls for the month of July. The release will offer clues on the health of the U.S. jobs market.

MCX August crude oil futures may open today’s session near Rs 6280 levels with resistance near Rs 6315-30 levels.

Source by Commodity Insights

Technical Comment For Day: Crude Oil

Oil........

Crude Oil settled at Rs 6251 per barrel, up 0.84%. The prices are shaping on the lower side similar to the open interest that is dipping with every passing session. The decline in open interest is an indicator that the path of Crude will become more skewed between upside and downside. The support for Crude is at Rs 6150, which is also its trend line support, intact from 9 July 2013.

Source by Commodity Insights

Oil Extends Losses In Asia

Oil.......

Crude oil futures slipped below $105 a barrel in the Asia electronic session today pressured by strength in the US dollar. The energy commodity is also undermined by growing concerns over the outlook for energy demand in China, ahead of manufacturing data from China and a statement on monetary policy from the U.S. Federal Reserve due this week.

Crude oil for September delivery is trading down 24 cents at $104.31 per barrel on the New York Mercantile Exchange. Yesterday, it fell 15 cents, or 0.1%, to settle at $104.55 a barrel. On Friday, the contract fell 79 cents to $104.70 a barrel.

The ICE dollar index, a gauge of the greenback’s movement against six other major currencies, rose to 81.711, up from 81.663 late Monday in North America. The euro bought $1.3260, little changed from $1.3263, while the British pound fell to $1.5339 from $1.5349.

On the data front today, Japan's industrial production took an unexpectedly sharp drop in June, falling a seasonally adjusted 3.3% from May, though manufacturers offered an upbeat outlook for the current month, the Ministry of Economy, Trade and Industry reported Tuesday.

Meanwhile, Japanese consumer spending made a surprise downturn in June, though the unemployment rate eased in the same month, the Finance Ministry reported Tuesday. Spending by households of two or more people fell 0.4% on a price-adjusted basis compared to a year earlier. On a brighter note, the unemployment rate eased to 3.9% in June -- an almost five-year low.

MCX August crude oil futures may open today’s session near Rs 6240 per barrel with support around Rs 6190 levels.

Energy investors have a busy week of economic updates to consider, including the first look at second-quarter growth in the U.S. and more manufacturing data from China for July. Last week, oil prices suffered their first weekly loss in five weeks after HSBC data showed manufacturing activity in China fell to an 11-month low in July.

A statement on monetary policy is due from the Fed on Wednesday, followed by statements Thursday from the European Central Bank and the Bank of England. The markets will watch for any language from the Fed that hints at the timing of when it will start tapering monetary stimulus. The central bank’s bond-buying program, part of a strategy to encourage economic growth, currently runs at $85 billion a month.

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Hot Commodities: Natural Gas Tumbles Near Six Month Lows

The US Natural Gas futures tumbled to near their six-month lows today as traders continued to sell the commodity amid a weak global economic backdrop. Prices have also been hit in the last few days on ideas that after predictions that most of the eastern U.S. will see seasonal temperatures, with lower readings in the Midwest. Today, the benchmark US contract slipped nearly 2% to quote at $3.497 per mmbtu as Asian stocks were pushed lower.

Natural Gas stockpiles rose by 41 billion cubic feet last week to 2.786 trillion, below the five-year average gain of 53 billion for the period, an EIA report yesterday showed. A deficit to the historic average widened to 1.6 percent from 1.2 percent the previous week. Inventories were 12.5 percent below year-earlier levels, compared with 13.1 percent in last week's report.

However, the commodity could turn up on updates regarding Tropical Storm Dorian. The storm is currency on the east of the northern Leeward Islands and is moving west-northwest and may be over the southern Bahamas early July 31. The storm has maximum winds of 50 miles per hour and is expected to weaken a bit in the next day or so, the center said.

For the time being though, bearish moves engulf the commodity quite vehemently. Asian stocks have tumbled heavily, down around 1-2% with Nikkei being slammed by nearly two and half percent. MCX Natural Gas is quoting at Rs 208.70, down 2% with a massive 8.8% increase in open interest.

A deficit to the historic average widened to 1.6 percent from 1.2 percent the previous week. Inventories were 12.5 percent below year-earlier levels, compared with 13.1 percent in last week's report.

Source by Commodity Insights

Commodities Buzz: US Timberland Index Up 9% In First Half Of Year

Returns on US forestry surged to their highest since the global economic crisis, and are poised for further gains, despite setbacks to hopes for housebuilding, a key destination for lumber. A timberland index compiled by National Council of Real Estate Investment Fiduciaries (Ncreif) showed a gain of 9.36% in the year to the end of June, the highest figure since autumn 2008, as the world was falling into slump.

The second quarter rise in US interest rates and the 9% drop in overall US housing starts triggered a slight downward adjustment in forecasts for housing demand for the remainder of 2013, the council said.

However, Ncreif notes that expectations are still on track for housing starts to climb north of 950,000 starts for 2013, a strong improvement after 2012's 780,000 starts. As the economy and housing markets continue to improve, the timber fund index should continue to see positive results.

The returns from timberland are well below those of 20.0% from farmland over the past year, but unlike agricultural property are on a rising annual trend, on Ncreif data.

Source by Commodity Insights

COMEX Gold Well Under $1330 Levels

Gold......

Gold

slipped well under $1330 per ounce today, not being able to hold onto its recent gains as traders resorted to profit selling ahead of the weekends. The metal witnessed a similar movement yesterday as well. The overall movement in global stocks is mixed today and gold is quoting at $1325.40, down $3.40 per ounce on the day.

Yesterday, a large increase in aircraft bookings during June drove orders for new U.S.-made durable goods up by 4.2%, the third straight large monthly gain. However, because of the volatile nature of the main component driving the headline index higher, traders continued to maintain a cautious stance on the economy. US stocks had another lackluster day amid disappointing earnings reports.

Dollar lost out yesterday and slipped further today, nearing its five week low against the Euro as Eurozone's leading economic index moved up 0.5 percent on a monthly basis to 107.5 in June, marking the third successive growth. The index increased for the third successive month in June, adding to hopes that the recession-stricken economy would recover in the second half, data from a survey by the Conference Board showed today.

The weakness in dollar could support gold. The metal has witnessed some good bargain hunting in last few days, with a break above $1300 per ounce keeping sentiments supported. The MCX Gold futures slipped towards Rs 27000 end edged up before giving up yet again today. The counter quotes at Rs 27390, down Rs 14 per 10 grams on the day. Prices had dropped to a low near Rs 27300 earlier in the session.

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Copper Mired In Tentative Trades As China Cuts Overproduction Capacities

Copper......

MCX Copper

futures are trading in a tentative manner as global copper prices continued to feel the pressure of weak Chinese demand. The global equities also mostly slipped today amid flat overnight cues from the US equities and COMEX Copper continued to ease from its six-week highs. The metal is quoting down 0.36% at $3.1740 per pound in the electronics trading right now.

China's government has ordered companies to close factories in 19 industries where overproduction has led to price-cutting wars, affirming its determination to push ahead with a painful economic restructuring despite slowing growth. The industry ministry issued orders late Thursday to more than 1400 companies to cut excess capacity that has led to financial trouble for manufacturers. It also applies to producers of copper and glass and requires some companies to close outright.

China's manufacturing activity slowed to an 11-month low in July, the first evidence of the Asian economic giant losing further momentum in third quarter. In a survey published today, British banking giant HSBC said its preliminary purchasing managers' index (PMI) hit 47.7 this month, down from a final 48.2 in June and the lowest since August. The index tracks manufacturing activity in China's factories and workshops and is a closely watched gauge of the health of the economy. A reading below 50 indicates slowdown, while anything above signals expansion.

The growth in the second largest economy in world has slipped to decade low of around 7.5% and has kept a lid on copper prices over last one and half years. Rising inventories and a surplus in global market have also had a depressing effect. ICSG has reported earlier this week that the world copper markets were in surplus of 50000 tonnes in April 2013. After making seasonal adjustments, the Copper markets were in production surplus of 106000 tonnes. The world copper markets were in surplus of 266000 tonnes in the first four months of 2013.

Caterpillar Inc released disappointing second-quarter earnings on Wednesday. The industrial giant stated that it expects the global economy to grow by just a little more than 2% in 2013, slowing slightly from a pace of around 3% last year. Recovery from the financial crisis in 2009 has been very slow by historic standards. Governments and central banks have consistently overestimated inflation problems and underestimated the need for economic growth, says the company.

Copper gained mildly yesterday, cutting losses amid dollar weakness but the rise was capped amid flat US stock markets and a not very impressive data. Orders for big-ticket US manufactured goods rose 4.2 per cent in June, which was higher than expected, but the increase was driven by transportation equipment orders, a typically volatile item. The MCX Copper futures are trading in a tight range today. The counter is quoting at Rs 415.20, down Rs 2.30 per kg on the day with a massive 8% increase in the open interest.

Source by Commodity Insights

Oil Holds Gains In Asia

Oil......

Crude oil futures held on to its gains near $ 105 a barrel levels in the Asia electronic trades today buoyed by the positive data from US. Positive economic news tends to boost oil prices since it raises expectations about improvement in energy demand. Data Thursday showed a 4.2% jump in U.S. durable-goods orders for June, the third straight big monthly gain. The first estimate of second-quarter gross domestic product in the U.K. showed 0.6% quarterly growth, in line with expectations. Crude oil for September delivery is trading up 6 cents at $ 105.55 per barrel on the New York Mercantile Exchange. Yesterday, it added 10 cents, or 0.1%, to end at $105.49 a barrel after touching a low of $104.08 in electronic trading. Oil prices on Wednesday fell 1.7% after an HSBC report showed preliminary manufacturing activity in China — among the world’s largest oil consumers. Taking a look at the long term, the U.S. Energy Information Administration’s International Energy Outlook report on Thursday released a forecast that world energy consumption will grow by 56% between 2010 and 2040 to 820 quadrillion British thermal units from 524 quadrillion Btus. Most of the growth will come from countries that aren’t part of the Organization for Economic Cooperation and Development. The EIA didn’t release an international energy outlook report in 2012. In 2011, it said it expected world energy consumption to grow by 53% from 2008 to 2035. On the data front today, Japan's consumer prices managed to register mild inflation in June compared with a year earlier, data out Friday from the Finance Ministry showed. The core consumer price index, which excludes volatile fresh-food costs, rose 0.4% from June 2012, though it was unchanged compared to May's levels. MCX August crude oil futures may open today’s session near Rs 6235 levels with support around Rs 6200 and resistance near Rs 6290 levels. Source by Commodity Insights

Gold Steady; US Data On Tap

Gold......

Gold

futures traded steady near $1340 an ounce levels in the early Europe session today with the US manufacturing and the home sales data on tap later today.

Gold for August delivery advanced $7.1 at $1,341.8 an ounce on the Comex division of the New York Mercantile Exchange.

The moves came ahead of a preliminary reading of U.S. manufacturing activity in July, with the report from Markit to mark the first national reading on manufacturing for the month. Also later Wednesday, the U.S. Commerce Department is expected to report a rise in sales of new homes in June.

Metals investors have keeping close tabs on economic data as the U.S. Federal Reserve assesses its next move on monetary stimulus that’s aimed at encouraging growth and has been considered beneficial for gold prices.

Gold prices have climbed more than 9% in July in part on speculation the Fed may continue with its current amount of stimulus for longer than anticipated. Last week, Federal Chairman Ben Bernanke said it was too early to determine whether the central bank will slow down the pace of asset purchases — now set at $85 billion a month — at its September meeting.

The base metals and crude oil futures lost ground on the heels of a weak reading for manufacturing activity in China.

US light sweet crude oil futures are trading down 3 cents at $ 107.20 per barrel in the mid electronic trades today.

September copper futures fell 3 cents, or 0.8%, to $3.17 a pound after the so-called “flash” version of HSBC’s Chinese manufacturing Purchasing Managers’ Index dropped to an 11-month low, at 47.7. Copper prices in July have gained 3.8%, but have dropped 13% on a year-to-date basis.

Prices of silver which has dual role as industrial and precious metals were able to gain ground on Wednesday. September silver rose 4 cents, or 0.2%, to $20.29 an ounce.

Source by Commodity Insights

Technical Comment For The Day: Crude

Crude........

Swings between gains and losses are set to continue in Crude oil. The prices settled at Rs 6393 per barrel on Tuesday. Last session saw Crude oil testing a high of Rs 6407 and a low of Rs 6322 per barrel. The prices are already in an overbought zone and rallies from here will be full of friction. However a safe approach of buying the Crude Oil is on its lows. Ascending triangle pattern is in the making but the confirmation of breach of resistance is yet to be received.

Trading Strategy: SELL MCX Crude AT 6380-90 TARGET 6325 SL 6410

Source by Commodity Insights

MCX Gold jumps more than Rs 600

Gold........

MCX Gold futures jumped well above Rs 27000 per 10-gram levels today as traders eyed a strong surge in global prices and plenty of fresh buying emerged on the first trading session of the week. The global markets turned in mostly a positive performance while US dollar was mostly mixed. The COMEX Gold futures broke above $1300 per ounce on a conclusive basis and currently trade at their one month high of $1319.80, up $26.90 per ounce on the day.

Gold jumped more than 1% last week, cutting back its losses after U.S. Federal Reserve Chairman Ben Bernanke said in congressional testimony that the central bank had no set timetable for slowing its monetary stimulus. The stimulus measures, known as quantitative easing, have been considered supportive for gold prices. Data from the Commodity Futures Trading Commission for the week ended July 16 showed a decline in gold gross speculative short positions from an all-time high in the previous week.

The overall global economic backdrop remains supportive for gold. Debt levels of the 17 European Union countries that use the euro have hit all-time highs in the first quarter of this year, keeping the worries hanging over the state of finances in the troubled monetary union. Eurostat, the EU's statistics office, says Monday that government debt as a proportion of the total annual gross domestic product of the Eurozone pushed up to a record 92.2% in the first quarter of 2013 from 90.6% the previous quarter.

European stocks have come off their highs but gold seems oblivious to these moves. COMEX Gold is looking strong ahead of the New York floor trading and could gain further. MCX Gold futures for August opened higher and raced away. After a brief consolidation around Rs 27150 per 10-gram levels, the contract yet again jumped in the afternoon. Prices hit a high of Rs 27370 per 10 grams and currently linger at Rs 27328, up more than Rs 600 or 2.30% on the day. Open interest in the counter is up 12% on the day.
Source by Commodity Insights

Technical Comment For the Day: Copper

Copper.......
The potential for Copper gaining ground is getting limited while the trading band is increasing significantly. Last night, the differential between the highs and lows was Rs 10, which is quite high and indicates the level of volatility this market has been facing. Caution is therefore advised in Copper moves. The prices are expected to get weak near Rs 419 per kg, which is the initial support zone for Copper. The selling can take it close to Rs 414 per kg.
SELL COPPER AT 418.5 TARGET 414 SL 420
Source by Commodity Insights

Oil Slips On Profit Taking

Oil.......

Crude oil futures slipped in the Asia electronic session trading as investors booked profits after the metal rallied yesterday buoyed by a drop in U.S. supplies that was nearly three times more than expected.
The U.S. Energy Information Administration in its weekly crude oil report said U.S. commercial crude oil inventories dived 6.90 million barrels to 367.00 million barrels last week, but are in the upper half of the average range for this time of year. The week before, crude oil inventories dipped 9.90 million barrels to 373.90 million barrels.
Late Tuesday, data from the API revealed that U.S. crude oil inventories shed 2.60 million barrels
NYMEX light sweet crude oil futures are trading down 26 cents at $ 106.09 per barrel. Yesterday, it added 48 cents, or 0.5%, to settle at $106.48 a barrel on the New York Mercantile Exchange. The contract fell 32 cents on Tuesday.
Meantime, U.S. crude oil imports during the week averaged 7.70 million barrels per day last week, up by 180,000 barrels per day from the previous week, official data revealed. Over the last four weeks, imports have averaged 7.70 million barrels per day, which were 1.10 million barrels per day below the same four-week period last year.
Comments from Federal Reserve Chairman Ben Bernanke during his first day of Congressional testimony contributed to oil’s up and down price movements. The Fed chief was due to speak before the Senate later Thursday.
MCX July crude oil futures may open today’s session near Rs 6291 with support around Rs 6260 levels.
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Oil Slips Below $106 In Mixed Asia

Oil........

Crude oil futures slipped in the mixed Asia trading today with the dollar trading slightly higher ahead of the Bernanke testimony.
In Asia, the Hong Kong stocks rose and Japanese shares fell ahead of Federal Reserve Chairman Ben Bernanke’s congressional testimony later in the day. Hong Kong’s Hang Seng Index climbed 0.6%, Australia’s S&P/ASX 200 added 0.1%, and South Korea’s Kospi gained 0.8%, with all of them reversing early losses.
Japan’s Nikkei Stock Average fell 0.7% in Tokyo afternoon trading after ending at a seven-week high Tuesday, while the Shanghai Composite lost 0.2%, after changing direction a few times.
NYMEX light sweet crude oil is trading down 16 cents at $ 105.85 per barrel extending yesterday’s 32 cent loss during regular New York Mercantile Exchange trading.
Oil gave further ground after the Nymex close as the American Petroleum Institute reported a 2.6-million-barrel drop in U.S. crude inventories for the week ended July 12. A Platts survey of analysts had forecast a decrease of 2.5 million barrels.
Strength in the U.S. dollar also pressurized oil today. The ICE dollar index edged up to 82.658 from late Tuesday’s 82.599 levels. A rising U.S. currency can dampen prices of dollar-denominated oil by making it more expensive in other currencies.
Forex markets are on edge ahead of congressional testimony from Federal Reserve Chairman Ben Bernanke, due later Wednesday and again on Thursday. In comments last week, Bernanke had eased concerns that the Fed would quickly unwind its monetary stimulus, with the remarks weighing on the dollar.
MCX July crude oil futures may open today’s session near Rs 6220 levels with support near Rs 6190 – 70 levels.
Source by Commodity Insights

Gold Slightly Higher Ahead Of Testimony

Gold futures are trading slightly higher in the Asia electronic trades today with investors focusing on the Federal Reserve Chairman Ben Bernanke on 16th semi-annual testimony before both houses of Congress on Wednesday and Thursday.
Gold futures for August delivery are trading up $1 at $ 1293 per ounce on the Comex division of the New York Mercantile Exchange. It settled at $1,290.40 an ounce, up $6.90, or 0.5%. Prices also gained 0.5% on Monday.
Gold futures gained on Tuesday for a second straight session with investors waiting for Federal Reserve Chairman Ben Bernanke's congressional testimony this week for hints on the central bank's next move on monetary policy.
US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.65% to trade at $82.65.
In other currencies, the Indian rupee opened higher by 26 paise at 59.05 on per dollar on Wednesday versus 59.31 Tuesday.
The euro rose to 1.31 to the dollar. The dollar index slipped below the 83 mark ahead of testimony by Federal Reserve Chief Ben Bernanke.
MCX August gold futures may open today’s session near Rs 26420 levels with resistance near Rs 26550 levels and support near Rs 26370-50 levels.
Source by Commodity Insights

Copper Caught In Confusing Trade, LME Prices Under $7000 After 3% Gain Yesterday

Copper......

MCX Copper

futures are off from their recent highs as some profit selling is emerging in the commodity on account of Chinese growth worries. The LME three-month copper had surged around 3% yesterday on the accommodative stance of the US Fed but pared back some of these gains today and currently quotes under the key $7000 per tonne mark. The COMEX Copper is also down nearly half a percent at $3.1605 per pound.

China's economic growth rate will likely average 7% this year, Chinese Finance Minister Lou Jiwei said yesterday, according to media reports. This is much below the government's 7.5% target and would mark a slowing from 7.7% growth reported for the first quarter of this year. However, Lou also said the economy would not suffer a hard landing and that the slower growth was necessary for the reforms that the government is undertaking to further open up the economy and move away from dependence on exports.

Data out earlier in the week showed that Chinese copper imports of refined metal, alloy and products were 379,951 tonnes in June, the highest since September. China consumes some 42% of the world's copper. However, much of this spurt could be construed as traders taking advantage of low prices in LME compared to that in Shanghai and as such, would be a mere arbitrage play. The latest headline export data from China confirms that the actual demand from export heavy Chinese industries is poor. China's exports slipped 3.1% in June from a year earlier, the first decline since January 2012, the Customs Administration said on Wednesday.

The US dollar is quoting around 1.3070 against the Euro, coming off its three week low after a massive hammering yesterday. This is exerting some pressure on copper and other commodities. MCX Copper tested a high of Rs 425.25 per kg last night and closed the session with a gain of Rs 11.05 per kg with a 4% increase in open interest. The counter is quoting at Rs 420.30; down Rs 2.75 per kg on the day with around 5% increase in open interest so far. This is a trifle unclear pattern and the meta could hold on only if it maintains above Rs 420 levels.

Source by Commodity Insights

COMEX Gold Off Highs As $1300 Acts As Stiff Resistance

Gold......

MCX Gold

futures for August are witnessing a mild sell off today. The commodity rose impressively yesterday on ideas that the Fed is in no hurry to cutback on its asset purchases. The metal shot up near $1300 per ounce in as the dollar slipped and equities rallied. The yellow metal had consolidated around $1250 per ounce earlier in the week. Gold had eased after a strong US non-farm payrolls data on Friday but has added impressive gains as prices managed to stay above $1200 per ounce. COMEX Gold futures currently trade at $1281.50, up $1.60 per ounce on the day.

Gold futures shot up towards $1300 per ounce after the US Federal Reserve's policy meeting minutes showed officials were split on the future of the central bank's stimulus program. About half the Fed officials believe the central bank should end its $85 billion-a-month bond-buying program by the end of this year, suggesting the policy makers are divided on the timing of the coming wind-down of the program. Many other participants anticipated that it likely would be appropriate to continue purchases into 2014, the minutes from the June 18-19 meeting said.

Gold jumped after this, which fanned hopes that the easy money measure wouldn't be removed sooner than expected. Gold has benefited from the Fed's stimulus program, as many traders bought the haven asset to protect against perceived risks like higher inflation and a weaker US dollar. Now, these traders worry gold prices will struggle in the absence of the supportive measure.

The Bank of Japan (BoJ) stated yesterday that the country's economy is starting to recover modestly, marking the first time that the economy is in an expansionary mode. The upbeat assessment of the economy came as the BoJ left its huge monetary easing programme unchanged. The bank is to stick to its plan of pumping more than 60tn yen ($606bn; £402bn) a year into the economy. Japan's economy is expected to recover moderately on the back of the resilience in domestic demand and the pick-up in overseas economies, the BoJ said in a statement.

These factors had supported the global stocks yesterday and US markets also followed suit with the S&P hitting a record closing high. However, Gold slipped from highs near $1300, failing to edge higher and dropped further today amid a mixed undertone in the Asian stocks. The physical demand for gold remains in a decent shape and the recent price destruction is reportedly bringing in good buying from retail investors and central banks in emerging countries. The MCX Gold futures are consolidating around Rs 26700 per 10-gram level mark. The counter is quoting at Rs 26670, down Rs 7 per 10 grams on the day after hitting highs above Rs 26850 yesterday.

Source by Commodity Insights