MCX COMMODITY MORNING MARKET UPDATES - 07 NOV 2017

Gold settled up as geopolitical risks drove investors to safe-haven assets after the metal’s third-straight weekly decline. Saudi Arabia’s future king, Crown Prince Mohammed bin Salman, tightened his grip on power through an anti-corruption purge by arresting royals, ministers and investors including billionaire Alwaleed bin Talal who is one of the kingdom’s most prominent businessmen. The dollar dipped after its biggest weekly rise this year, while Germany’s benchmark bond yield held near two-month low as investors awaited clues on the European Central Bank’s asset purchase plans. U.S. 10-year yields also hit their weakest in two weeks. Gold has drifted lower over recent weeks, pulling back 2.5 percent from its mid-October peak as expectations for a Fed interest rate increase were shored up by upbeat U.S. data. U.S. President Donald Trump will step directly into the shadow of the North Korean nuclear standoff on Tuesday on a visit to South Korea in which his words alone could risk further inflaming tensions with North Korean leader Kim Jong Un. Hedge funds and money managers reduced their net long position in COMEX gold contracts for the seventh straight week, in the week to Oct. 31, U.S. Commodity Futures Trading Commission (CFTC) data showed. Demand for physical gold was lacklustre in top consumers India and China this week, while the lure of the metal remained stable in Singapore, but India’s peak wedding season is expected to usher in renewed interest for bullion in coming weeks.

Crude oil on MCX settled up 3.13% at 3691 continued to surge in yesterday’s session tracking NYMEX Crude oil which jumped $1.71 to settled at $57.35/bbl, the highest in two years after a purge of royal family's political rivals in Saudi Arabia. Saudi Arabia's famed billionaire investor al-Waleed bin Talal was arrested and faces money laundering charges in a purge supposedly orchestrated by Crown Prince al-Salman. An anti-corruption drive led by Saudi Arabia Crown Prince Mohammed bin Salman resulted in wave arrests of prominent Saudi including royals, ministers and investors, fuelling political risk in the region. The anti-corruption crackdown comes as optimism grew for an extension to the output-cut agreement beyond March amid comments from Saudi energy minister Khalid al-Falih, who highlighted the importance of further cuts. “There is a general satisfaction with the strategy of 24 countries that signed a declaration of cooperation,” Khalid al-Falih said Friday. “Everybody recognises that (the) job is not done yet by any means, we still have significant amount of work to do to bring inventories down. Mission is not yet complete, more needs to be done,” he added. In the U.S. meanwhile, traders continued to cheer data pointing to tightening in production after Baker Huges reported Friday that the number of oil rigs operating in the US fell by eight to 729. In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.

Copper on MCX settled up 1.16% at 450.95 once again prices gained above 450 level mark on short-covering tracking firmness from LME Copper which closed up 1.1 percent at $6,970, paring losses from the previous session. Copper prices have climbed 7 percent this quarter and are eyeing a sixth straight quarter of growth. On the other side the dollar was little changed, lessening some headwinds for metals after surging on bets that the Federal Reserve will raise interest rates again next month and tighten further into 2018 as U.S. economic growth remains firm. Also support seen as Copper production in Democratic Republic of Congo, Africa's top producer of the metal, was up 9.3 percent this year through September over the same period last year at 831,000 tonnes. Overall commodity like Nickel and copper look firm as sentiments are boosted by expectations of healthy demand from the electric vehicle sector, a pollution crackdown in China and signs of solid global economic growth. Also participants at the LME Week industry gathering in London last week were bullish about the sector's prospects, especially because of anticipated growth in demand for electric vehicles, which depend heavily on nickel and copper. In the week ahead, investors will continue to monitor the progress of the U.S. tax reform bill in what will be relatively quiet week for economic data. China is to release data on trade and inflation while monetary policy announcements from the Reserve Bank of Australia and the Reserve Bank of New Zealand are also be on the agenda.

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