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Thursday 23 August 2018

CAPITALSTARS FRIDAY MCX COMMODITY MARKET UPDATE



BULLION:-
Gold prices held firm on Friday, after falling nearly 1 percent in the previous session and sentiment for the yellow metal remained negative amid an outlook for rising U.S. interest rates. Federal Reserve policymakers broadly agree that U.S. interest rates should rise further this year and next, despite U.S. President Donald Trump’s displeasure with such a plan, two policymakers’ comments underscored on Thursday. The Fed’s latest policy meeting minutes suggested it is on course to raise interest rates further after two hikes this year, denting demand for non-interest-yielding gold. Markets are awaiting Fed Chairman Jerome Powell’s comments on Friday at the central bank’s annual meeting in Jackson Hole, Wyoming for any change in its interest rate stance, especially after U.S. President Donald Trump’s attack on its monetary policy this week. U.S. and Chinese officials ended two days of talks on Thursday with no major breakthrough as their trade war escalated with activation of another round of tariffs on $16 billion worth of each country’s goods. The number of Americans filing for unemployment benefits fell last week but sales of new single-family homes unexpectedly declined in July. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.19 percent to 767.23 tonnes on Thursday from Wednesday.


METALS:-

London copper pared previous session losses during early Asian trade on Friday, after US and Chinese officials ended two days of trade talks without any major breakthroughs. London Metal Exchange copper is on course to end the week higher, which would mark its first weekly jump since the week ended Jul. 27, as the trade talks fuelled optimism. The metal remains down 5.2 percent this month on concerns the U.S.-China trade row will hurt demand for industrial metals and is heading for its worst month since August 2016. China and the United States had a constructive and candid exchange over trade issues, the Chinese commerce ministry said in a statement on its website on Friday. Shanghai lead was the top performer in the base metals complex, rising as much as 2.3 percent to a two-week high of 18,205 yuan a tonne on concerns over tight stocks, while zinc added around 1 percent. Canadian diversified miner Teck Resources Ltd , said on Thursday that lead smelting at its Trail, British Columbia facility was suspended for a fourth day due to wildfires in the province. The global world refined copper market showed a 31,000-tonne deficit in May, compared with a 105,000-tonne deficit in April, the International Copper Study Group (ICSG) said in its latest monthly bulletin. A recent Reuters survey showed analysts on average expect a copper market deficit of 129,000 tonnes this year and a shortfall of 151,000 tonnes in 2019.



ENERGY:-

Crude oil futures were higher during mid-morning trade in Asia Friday as market attention shifted to increased trade tensions between the US and China as the latter imposed a 25% tariff on US oil products. China Thursday imposed tariffs on a second round of US goods in retaliation for US tariffs, targeting oil products and coal for the first time, and leaving open the possibility of including crude oil and LNG next. The move came in the midst of trade talks between the two countries in Washington, which market participants did not expect would yield any firm outcomes that would ease tensions. Crude oil was pulled from the current round when the final list was announced earlier this month, but there is no indication it is completely off the table. LNG also remains on the drawing board for the next round. With shifting political rhetoric, uncertainty has prevailed in the market since Beijing first threatened 25% retaliatory tariffs on US oil products in early April. The tariff imposition comes at a time when the market was already being supported by a large draw in US crude inventories. Market participants were also watching for comments on Saudi Arabia's decision to go ahead with publicly listing its state owned oil company Aramco. In a statement late Wednesday, Saudi energy minister Khalid al-Falih firmly refuted media reports the kingdom had shelved its long-mooted plans to list Aramco shares.

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