commodity tips:-
MCX REPORT:-
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NEWS:--
ENERGY :-
- The
American Petroleum Institute (API) reported a major draw in commercial
crude storage, forecasting a drop of 5.78 mmb for the week ending August
25. Gasoline inventories are expected to rise by 0.47 mmb and
Distillates may fall by 0.48 mmb for the reporting week.
- Crude Oil has been struggling over the past few sessions as Hurricane
Harvey wreaked havoc along the Gulf Coast shutting down refineries and
processing units which in turn push oil prices lower as closures would
mean lesser demand for oil in the immediate term.
- Refining demand has been one of the key drivers for Crude Oil along with
past few months despite rising US production and OPEC's lack of
compliance to output cuts. EIA is scheduled to release its official
report at 8 pm with analysts forecasting a 1.9 mmb draw in oil stocks
along with minor withdrawals for gasoline and distillates.
- The short term trend should continue to remain weak but we may see
some short covering in intraday if oil inventories are in line or better
than forecasts.
BULLION:-
- Precious
Metals are expected to come under pressure today as nonfarm payrolls and
revised second quarter GDP strengthened suggesting that the FED may be
able to push for another rate hike this year. An increase in rates is
typically negative for non-yielding assets like Gold and Silver.
- Non-Farm Payrolls rose 237,000 in August beating forecasts of 183,000
and even stronger than the revised figure of 201,000 in the previous
month whereas revised Q2 GDP rose 3.0% compared to analyst expectations
of 2.7%.
- The strength in the recent data has seen the dollar recover higher as it
raises possibilities of a rate hike from the central bank this December
which could be negative for precious metals as a whole. We are
expecting limited downsides in prices as geopolitical tensions and safe
haven factors continue to underpin demand for such assets.
- We are slightly negative on precious metals for the day and expect further declines towards the closing.
commodity tips:-
MCX REPORT:-
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- Gold rallied to a 10-month high spurred by safe haven buying after
North Korea test fired several rockets into the sea over Japan renewing
tensions in the South Asian region. Gold futures, for immediate
delivery, is trading at $1328.62/oz, up over a percent whereas Silver is
up 18 cents to trade at $17.63/oz.
- Gold has been gaining steadily
over the past few weeks as geopolitical tensions pushed prices to its
highest level in 2017 and the recent consolidation was a result of the
absence of the safe haven factors which waned over the past week. North
Korea recent provocation once again brings back buying in precious
metals. We are also set to see the Consumer Confidence figures from the
US which may have weakened in August according to forecasts, a weaker
figure could push Gold further higher.
- In the short term, we maintain a very bullish view on Gold and expect prices to test $1350-$1360 in the coming weeks.
Energy:-
- Crude Oil
prices continued to dip further for the second day this week as the
market continued to analyze the situation. WTI futures, traded on NYMEX,
is down 0.34% to trade at $46.37/bbl while domestic prices are trading
at Rs.2975, up 5 points today.Hurricane Harvey, the largest storm to
hit the Gulf Coast shut down a majority of refining units and off shore
drilling rigs as it made landfall over the week.
- The major impact as
felt in the Texas region which accounts for almost 11% for the entire US
refining capacity. The immediate impact was a sharp rally in gasoline
prices and crude is likely taking the collateral damage as closed
refineries would lead to lesser demand for oil prices. The full extent
of the damage is yet to be understood and a drawn out impact/closure of
facilities could eventually lead to prices recovering higher as we move
ahead.
- The short term picture looks weak for Crude prices are we may
see further declines this week. Support is seen at Rs.2950 breaking
which we expect oil to drop below Rs.2900. We also have the API oil
storage forecast overnight and the EIA reports tomorrow which could
infuse further volatility in prices.
Base Metals:-
- Base
Metals extended gains with short sellers being wrong footed at every
price. Nickel and Lead are the leading performers today gaining over 3
percent each followed by Zinc and Aluminium. LME Copper is higher by
1.68% at $6812.50/ton.
- The relentless rally in Base Metals not only
signals a strengthening economy but it also indicates the beginning of a
major bull market in the industrial metals. The higher prices driven by
expectations of stronger demand from China and US, supply deficits
forecasts and a wide range of policy measures to cut down production
across global producers have been the key factors supporting prices. We
have been cautious on prices for the past 2 days indicating that the
market may have overrun its course and should be due for a sharp
correction in the near term which should also help keep the bull trend
intact.
- Without the weight of evidence suggesting a reversal, we advise
continuing to consider long positions in base metals with tighter stop
losses and larger targets on the upside.
The intraday bias continues to remain positive with a cautious stance.
