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Thursday 16 August 2018

CAPITALSTARS MCX COMMODITY MARKET UPDATE

BULLION:-
Gold prices on Thursday hit their lowest in more than 19 months, with the US dollar holding steady near a recent peak as concerns about a Turkey crisis and China’s economic health weighed on emerging market currencies. The United States on Wednesday ruled out removing steel tariffs that have contributed to a currency crisis in Turkey even if Ankara frees a U.S. pastor, as Qatar pledged $15 billion in investment to Turkey, supporting a rise in the Turkish lira. The United States on Wednesday imposed sanctions on a Russian port service agency and Chinese firms for aiding North Korean ships and selling alcohol and tobacco to Pyongyang in breach of U.S. sanctions aimed at pressuring North Korea to end its nuclear programs. Some emerging market countries pared their holdings of U.S. Treasuries in June, data from the U.S. Treasury department showed on Wednesday, in what analysts viewed as a move to support their currencies as the Federal Reserve started raising interest rates this year. U.S. retail sales rose more than expected in July as households boosted purchases of motor vehicles and clothing, suggesting the economy remained strong early in the third quarter. China’s state planner pledged on Wednesday to keep debt levels under control even as Beijing rolls out fresh stimulus to support the stumbling economy as a trade war with the U.S. deepens.

METALS:- 
Copper prices fell to a fresh 13-month low after data showed fixed-asset investment in China slowed to a nearly two-decade low in the first seven months of the year. A strike had been averted at the world's largest copper mine put a cap on hopes of recovery for the bellwether metal. Reuters reported that management at Chile’s Escondido, said it struck a deal on Wednesday on a new labor contract with the union representing most of its workers. Large rises in zinc stocks stored in LME-approved warehouses have created $16 a tone discount between the cash and three-month contracts from a premium of about $60 a tone at the end of July. LME stocks, at 256,175 tones, have jumped more than 10 percent since last week. China’s primary aluminum production climbed 12 percent in July from the same period a year ago, equaling its monthly record, as new smelters took output back towards levels before capacity closures in mid-2017. According to Japan's Ministry of Finance, Japan's Merchandise Trade Balance contracted by much more than expected, sinking to ¥-231.2 billion compared to the expected ¥-41.2 billion. The prior trade balance was ¥720.8 billion. The adjusted trade balance also missed and printed in contraction, coming in at ¥-45.6 billion versus the expected ¥20.7 billion surplus. Exports sank to 3.9% y/y compared to the forecast 6.3%; previous was 6.7%. Imports surged to 14.6% y/y, last was 2.6%. Exports to the US declined in July by 5.2% y/y, while exports to China lifted 11.9% y/y.

ENERGY:-
Oil prices plunged after government data showed a big, unexpected jump in stockpiles of U.S. crude, compounding pressure as the outlook for global economic growth darkened and the stock market slumped. After the American Petroleum Institute surprised markets by reporting a build of 3.66 million barrels for the week ending August 10, the Energy Information Administration confirmed a build, but reported that it had been significantly bigger at 6.8 million barrels. The EIA reported that at 414.2 million barrels, U.S. crude oil inventories are a bit above the five-year average for the season. In gasoline, inventories were down by 700,000 barrels last week, compared with a build of 2.9 million barrels a week earlier but slightly above the seasonal average. Gasoline production averaged 10.2 million bpd, from 9.9 million bpd the week before last. Distillate inventories added 3.6 million barrels last week, after a build of 1.2 million barrels in the prior week, with production averaging 5.3 million bpd, up by 100,000 bpd on the previous week. Meanwhile the market is worrying about supply from Venezuela and preparing for the last round of U.S. sanctions against Iran, which will target its oil industry specifically. Some oil bulls are preparing for oil prices of US$150 and even US$200, Reuters reported yesterday, citing prominent hedge fund manager Pierre Andorran and Jean-Louis Mee, chief executive of West beck Capital.
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