MCX COMMODITY MARKET MORNING NEWS UPDATES - 03 NOV 2017

Gold prices pared gains after Republicans in the U.S. House of Representatives unveiled legislation to overhaul the U.S. tax system - Gold settled flat while sentiments remain firm as support will be seen amid a weaker dollar, on increased demand from Chinese retail investors and as the market waited for the announcement of a new chair of the US Federal Reserve, expected later in the day. Higher demand from Chinese retail buyers has raised domestic bullion prices and global prices have risen to narrow the gap. Republicans in the U.S. House of Representatives unveiled a tax bill on Thursday that would cost $1.51 trillion and deliver deep tax cuts as promised by President Trump, setting off a race in Congress to give him his first major legislative Win. Gold has advanced about 11 percent this year, building on gains in 2016 as U.S. policy makers opted for two rate increases. On Thursday, the Bank of England raised rates for the first time in more than 10 years while indicating another increase isn’t imminent. The next Fed chair will be a continuation of Yellen, it’ll probably be a continuation of the same rate plan we’ve been seeing over the past two years.

Crude oil prices steadied as supply cuts by OPEC and other major exporters tightened the market and drained inventories – Crude oil on MCX settled up 0.57% at 3520 as OPEC’s two biggest members publicly endorsed an extension of production caps that have eroded a worldwide glut. Oil chiefs from Saudi Arabia and Iraq expressed confidence the historic accord between OPEC and other major crude suppliers that has trimmed stockpiles will be extended beyond its March expiration. Saudi Arabia and Iraq together account for almost half of the barrels OPEC producers. Oil has climbed more than 15 percent since the beginning of September on signs that global supplies are tightening and the Organization of Petroleum Exporting Countries and allied producers may extend their efforts. In the U.S., crude stockpiles slid to the lowest level since January 2016 last week, according to an Energy Information Administration on. Saudi Oil Minister Khalid Al-Falih said in Bangkok that he expects “improving market conditions to continue, and as my colleagues in OPEC and non-OPEC gather in four weeks in Vienna, I expect that we will renew our resolve to return already improving global inventories to their normal levels.

Zinc prices dropped on profit booking after prices seen supported after LME zinc hit its highest since August 2007 on deficit expectations - Zinc on MCX settled down -0.35% at 211.25 tracking weakness from LME Zinc which was down 0.8 percent despite exchange stocks are very low and global market facing tight supply. Support also seen as Stainless steel raw material nickel surged by more than $1,100 a tonne over Tuesday and Wednesday on expectations that demand would be boosted by a rise in electric car buying, while zinc hit its highest since August 2007 on deficit expectations. Zinc inventories held in LME-registered warehouses fell by another 3,125 tonnes, data showed on Thursday, to their lowest since early October at 250,900 tonnes. from other news yesterday the Bank of England raised its interest rate for the first time in a decade, but signaled that its future rate hikes would be limited and gradual. The Monetary Policy Committee, headed by Governor Mark Carney, decided to lift the benchmark rate by 25 basis point to 0.50 percent. This was the first rate hike since July 2007. Meanwhile traders, producers and end-users have gathered in London for a key industry conference this week. While the dollar fell as investors took profits after the Federal Reserve left interest rates unchanged on Wednesday, as expected, while uncertainty around the next U.S. Federal Reserve chair wound down as U.S. President Donald Trump prepared to nominate moderate Governor Jerome Powell.

Nickel prices dropped as traders cashed in gains after prices posted its biggest two-day jump in more than three Spices years - Nickel on MCX settled down -0.87% at 808.60 dropped on some profit booking while sentiments remain bullish only as rally driven by expectations of rising demand for electric and hybrid vehicles. Battery makers are increasingly turning to nickel to help power growing global electric car sales, but only half of the world’s producers of the metal are likely to benefit. The battery boom promises a new and growing market for miners producing high-grade nickel products. However, half the world’s supply of the metal, comprised of so-called ferronickel and nickel pig iron grades, is unsuitable for battery production, according to UBS. Meanwhile Shanghai nickel, which had jumped by its 6 percent limit on Wednesday, rallied further to finish at $15374.94 a tonne, its highest close since June 2015. LME nickel, which had hit its own highest in more than two years above $13,000 a tonne on Wednesday, was down 0.2 pct at $12,765 a tonne. Meanwhile data point from US shown that US factory activity retreated from a 13-1/2-year high in October as some of the boost from hurricane-related supply disruptions faded, but continued to point to strengthening manufacturing conditions.

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