MCX COMMODITY MARKET MORNING UPDATES - 29 AUG 2017

Gold surges above $1,300 as dollar falls to 16-month low - Gold prices surged above $1,300, as gold bugs continued to cheer a speech by Federal Reserve chair Janet Yellen, which failed to include details on monetary policy or balance sheet normalization, narrowing investor expectations of a rate hike later this year. Gold prices raced to a nearly 10-month high on Monday, buoyed by a sixteen-month slump in the dollar as investor expectations of an additional rate hike continued to fade, following Fed chair Janet Yellen’s decision to sidestep monetary policy in a speech at Jackson Hole on Friday. According to investing.com’s fed rate monitor just over 30% of traders expect the fed to hike rates in December. Gold’s surge above $1,300 comes after recent political controversies engulfing President Donald Trump sparked concerns over his ability to deliver on tax reform, raising investor demand for safe-haven assets like gold.

Weak SHFE Aluminum Hurts Buying Appetite in Spot Market, SMM Says - Downstream producers in south China market watched from the sidelines today against weak SHFE aluminum. Cash crunch at month’s end curtailed trading among traders. Hence, overall trading was muted. Mainstream traded prices were 16,090-16,130 yuan/tonne in Guangdong, a premium of 90 yuan/tonne over Shanghai.

Survey of Factors behind Surging Zinc Price - Many zinc traders contributed the surge in zinc market mainly to two factors, 21st Century Business Herald reported. First supply deficit in domestic zinc market was exacerbated by capacity cut for environmental factor. Second China’s zinc inventories move closer to 120,000 tonnes, which attracted inflows of speculative funds. Most of them came from those originally in steel futures market. One trader said strange phenomena were seen in zinc spot trading market, according to the report, and approximately 70-80 per cent of domestic zinc inventories were controlled by several traders, and they made profits by pushing up premiums by holding back sales. 

Crude gains in Asia as analyst see recovery by refiners in sight - Crude oil prices gained in Asia on Tuesday as the market works through the impact on the U.S. Gulf Coast refining and crude output sectors though a rebound is expected as the damage from the storm and flood get fixed. "It really does depend. Corpus could be back next week, Houston we don't know, but in the next few weeks as things return to normal, we should see a little bit of a price bounce again," said Matt Smith, an analyst with Clipper Data. Overnight, crude futures settled lower on Monday, as Tropical Storm Harvey continued to disrupt refinery activity along the U.S. Gulf coast, adding to fears of an uptick in crude oil supplies. Crude oil made a negative start to the week as flooding caused by the storm forced refiners in the Gulf of Mexico region to shutdown, sparking concerns over an excess in crude oil supplies, the primary input at refiners.

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