MCX COMMODITY MARKET NEWS & UPDATES - 04 OCT 2017

(NATURAL GAS) Big Decision for Buyers and Sellers - Natural gas futures continued to fall on Tuesday, just a day after plunging over 3 percent. The price action suggests final long liquidation on the realization that the change in season from summer to fall will likely lead to a drop in demand. Although we may see a few short-covering rallies due to oversold conditions throughout the month, gains should be limited amid bearish weather forecasts. Seasonal factors may also contribute to the weakness. Gas futures have a tendency to weaken in October when mild weather reduces demand, before recovering at the start of winter, when buyers start to position themselves ahead of colder weather. The U.S. continues to be divided diagonally by cool weather in the west and warm to very warm weather in the east. However, this is expected to neutralize demand. Overall, national demand will be moderate to low.

(GOLD) Short-covering Ahead of ADP report Boosting Prices - Gold touched a seven week low on Tuesday, but managed to claw back some of the loss, finishing only slightly lower. Supporting the market after hitting its intraday low was a rally in the Euro which put some pressure on the U.S. Dollar Index. However, gains were limited by firm U.S. Treasury yields, expectations of higher interest rates and increasing demand for higher risk assets. At the close, the CME’s Fedwatch indicator showed investors were pricing in a 77 percent likelihood of a December rate hike, up from 48 percent on September 19, the day before the Fed’s monetary policy meeting. U.S. and world stocks also rose to new records as they celebrated positive global growth. Gold could continue to fell pressure if this indicator continues to rise. The U.S. Dollar weakened from its high on Tuesday, but that was only enough to drive gold off its low. The dollar was pressured by a stronger Euro, but it continued to gain on the Japanese Yen. Additionally, U.S. and global stock markets continued to make record highs. Gold is not likely to have a meaningful rally unless there is a flight-to-safety situation. And that is not likely to happen unless North Korea rears its ugly head. Any rally is likely to be fueled by short-covering related to profit-taking in the dollar, Treasurys or the stock market.

(CRUDE OIL) EIA Gasoline Number Will Set the Tone - U.S. West Texas Intermediate and international-benchmark Brent crude oil finished lower on Tuesday as investors continued to take profits after last quarter’s stellar gains. Much of the rally last quarter was news driven with aggressive hedge fund buying generating the upside momentum. The main catalyst behind the rally was expectations of increased demand according to reports from OPEC and the International Energy Administration. However, since that initial rally, bullish investors have been waiting for fresh news. In the meantime, the wall of worry about the supply glut has been encouraging investors to take profits and pair positions. New data from the Commodity Futures Trading Commission shows that money managers have pushed their bullish bets on the Brent crude market to a record high in the last week, encouraged by signs of rebalancing between supply and demand.

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