WEEKLY MCX COMMODITY MARKET NEWS -25 JULY TO 30 JULY 2016

                                                                        
GOLD :- Gold tumbled this week to close at 1322.00 down by .34% while it remains up almost 25% for the year. Traders are steady ahead of the two central bank meeting this week, but gold remains bearish. The Federal Reserve will meet for a policy meeting on July 27 but is unlikely to announce a rate cut at that time, given current economic conditions. Is the Federal Reserve leaning more towards a rate hike before the end of the year? The markets appear to think so, as the chances of a rate hike this year has been priced in at 47%, up from just 20% at the start of July. This positive sentiment is a result of strong retail sales and housing reports over the past week. Another rate hike will be data-dependent, so if key indicators beat expectations, speculation of a rate hike will continue to increase. However, the Fed will be hesitant to make a move if inflation remains stuck at very low levels, nowhere near the Fed’s target of around 2 percent. The World Gold Council (WGC) believes that an “entirely new class of gold investor” could emerge because of the significant global increase in the interest in gold stocks, following the Brexit vote – the British exit from the European Union.


COPPER :- Copper is trading near its highest level at 2.236 with a gain of 0.22% this week and over 5% year to date. Additional demand as well as higher US housing data helped support the metal, while hopes of stimulus from the Bank of Japan also boosted metals. Purchases of previously owned homes surged with help from first-time purchasers who have been slow to return to the market. Burgeoning wage growth and steady job gains, coupled with low mortgage rates, are giving those entering the market a lift just as investors step away. Demand for the most-
expensive properties is strengthening on the back of all-time highs in the stock market that have buoyed wealthier Americans. Keeping a ceiling on sales is super-low supply -- June marked 13 straight months of year-on-year declines in inventories. The group’s chief economist said June may have represented the high-water mark for 2016. Copper prices dropped under pressure from a stronger U.S. dollar and an increase in production from China, the world's largest copper consumer. Chinese data that indicates a growing surplus in copper also weighed on prices and the outlook for the industrial metal. According to China's National Bureau of Statistics, copper production in the first half of the year expanded by 7.6%, despite expectations that producers would cut back.

CRUDE OIL :- Crude Oil closed the week near a recent bottom at 44.23 down 3.75% for the week as production remains high, global inventories are off the charts and the IMF downgraded growth again reducing longer term demand. Brent oil followed cues from WTI to trade at 45.73. US crude stockpiles continue to decrease, according to the Energy Information Administration. The EIA published its weekly inventory report on Wednesday, and the indicator showed a decline of 2.3 million barrels, a much larger draw-down than the estimate of 1.3 million. Continuing large declines in US stockpiles should push crude prices higher due to stronger demand, but this isn’t occurring, due to a continuing oversupply of crude. Drilling activity in the US is on the upswing, as the number of US drilling rigs continues to increase. This is raising concerns that higher production levels in the US will exacerbate supply levels and push down crude prices. In late June, US crude broke above the $50 level, but has since dropped about 10 percent as it hovers at around $45.

 CAPITALSTARS