MCX COMMODITY MORNING MARKET UPDATES - 18 OCT 2017

GOLD :- Gold prices fell to a one-week low on Tuesday on speculation that the eventual successor to U.S. Federal Reserve Chair Janet Yellen will favor higher interest rates. Spot gold was down 0.7 percent at $1,285.40 an ounce, while U.S. gold futures for December delivery slipped 1.2 percent to $1,286.80 per ounce. U.S. President Donald Trump was favoring policy hawk John Taylor as the next head of the Fed, Bloomberg reported, pushing the dollar higher and lifting U.S. Treasury yields. Taylor, a Stanford economist, is seen as more likely to raise rates than Yellen, which would boost the dollar and dent gold and U.S. Treasuries Meanwhile, the U.S. Labor Department said on Thursday import prices jumped 0.7 percent last month, the biggest gain since June 2016, pushing inflation expectations higher and increasing the likelihood of monetary policy tightening. The Fed will probably need to raise rates in December and then three or four times “over the course of next year”, assuming U.S. unemployment continues to fall and inflation rises, Boston Fed President Eric Rosengren said. Gold’s generally loses some of its in appeal when interest rates are higher as it yields no interest.

CRUDE OIL :- Oil gave up earlier gains Tuesday, pulling back in the wake of a two-session climb, but fighting in Iraq and tensions between the United States and Iran kept prices close to a three-week high. November West Texas Intermediate crude fell by 23 cents, or 0.4%, to $51.64 a barrel on

the New York Mercantile Exchange after tapping a high of $52.25. It settled at $51.87 Monday, it’s highest since Sept. 27. Brent crude for December, -0.66% lost a penny to $57.81 a barrel. A monthly report from the Energy Information Administration released Monday showed expectations for a rise of 81,000 barrels a day to 6.12 million barrels a day in shale oil production from seven key U.S. shale regions in November. Elsewhere, Iraqi forces clashed Monday with fighters from Iraq’s semi-autonomous Kurdish region in the oil-rich province of Kirkuk, in a continuing standoff over Kurdish independence. The violence followed a referendum late September in which the Kurds voted overwhelmingly in favor of independence, in defiance of the central government in Baghdad and other regional powers. Iraqi Kurdistan exports nearly 600,000 barrels of oil a day, mainly via a pipeline that runs through Turkey. With Iraqi forces now in control of some Kurdish oil fields, much of these exports could be blocked. That potential reduction to global supply has boosted crude prices in recent days.

BASE METAL:- Zinc prices slipped to their lowest level in over three weeks on Tuesday as the dollar strengthened and inventories rose, highlighting concern that increasing supply would ease shortages. On-warrant zinc Metal not earmarked for delivery from warehouses and available for

investors - jumped by 17,850 tonnes, bringing the rise this month to 27 percent. Zinc has gained 21 percent this year, touching its highest price in a decade at $3,308.75 a tonne this month on concern about shortages, though these might soon be eased. LME benchmark zinc closed down 3.4 percent at $3,085 a tonne, the biggest one-day fall in six months. It touched a low of $3,054, the weakest level since Sept. 22. Also pressuring zinc were moves by the Shanghai Futures Exchange to limit the size of December future positions and adjusting fees. The dollar strengthened to a oneweek

high against a basket of major currencies, weighing on the entire base metals complex. A stronger dollar makes metals more expensive for investors using other currencies.

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