MCX COMMODITY MARKET MORNING UPDATES - 22 SEP 2017

COPPER - December Comex High Grade Copper hit its lowest level since August 17 on Thursday after the U.S. Federal Reserve raised expectations for a third rate hike this year at its Federal Open Market Committee meeting yesterday. The news drove up U.S. Treasury yields which made the U.S. Dollar a more popular investment, reducing demand for dollar-denominated copper. A weaker dollar helped drive up copper prices in August and now we’re seeing the stronger dollar pounding industrial and precious metals. Traders have been eyeing the price action as the market approaches a major support area. Fundamentally, demand may not be that strong, but supplies have been reduced. The bulls are thinking that it’s not going to take much demand to put the metal in deficit. In other news, the global world refined copper market showed a 70,000 tonnes deficit in June, compared with a 50,000 tonnes deficit in May, the International Copper Study Group (ICSG) said.

GOLD - Gold markets fell significantly during the session on Thursday, breaking below the $1300 level. As I record this, it looks like we are bouncing a little bit but quite frankly I think that this was a very negative turn of events. The Federal Reserve cutting back its balance sheet should continue to put the US dollar in a positive light, and that will more than likely continue to work against the value of gold. I think the precious metal trade is coming unwound, especially considering that most of it was due to the tensions with the North Koreans. If the North Koreans and the situation in that area were to keep calm and quiet, I don’t see any reason as to why gold would suddenly rally again. In fact, I think the sellers get to be stepping on rallies as they appear.

NATURAL GAS - Natural gas prices tumbled on Thursday slicing through short-term support near the 10-day moving average at 3.03, following a larger than expected build in inventories reported on Thursday by the Department of Energy. Support is seen near an upward sloping trend line that comes in near 2.92. Resistance is seen near former support near the 10-day moving average. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. Inventories Rose More than Expected

CRUDE OIL - U.S. West Texas Intermediate and international-benchmark Brent crude oil closed mixed on Thursday with Brent posting a slight gain. Traders were bracing for Friday’s meeting of OPEC and non-OPEC producers that could extend production limits or deepen the cuts designed to trim the supply glut and stabilize prices. Ministers from OPEC, Russia and other producing countries meet in Vienna on Friday and are due to consider extending output cuts that began in January. Kuwaiti Oil Minister Essam al-Marzouq said on Thursday that compliance with OPEC-led oil output cuts was “very good” and above 100 percent. This supports the notion that OPEC will extend the deal, possibly to the end of next year.

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