MCX COMMODITY MORNING MARKET UPDATES - 10 NOV 2017

Gold Dips In Asia, But Well Supported On Middle East Tensions, APEC Eyed - Gold dipped in Asia on Friday, but remained well supported on Middle East tensions between Iran and Saudi Arabia and await a summit in Vietnam among Asia-Pacific nations. Overnight, gold prices rose to three-week highs on Thursday amid a slump in the dollar on fears that the Senate would delay corporate tax cuts until 2019. Gold prices added to gains from Wednesday’s session after the dollar fell on reports that Senate Republicans on Thursday will propose delaying a cut in the corporate tax rate from 35% to 20% until 2019. The news of a possible delay to corporate tax cuts halted recent risk-on sentiment, fueling a flight-to-safety as traders appeared to unwind their bullish bets on riskier assets which followed on expectations that President Trump’s tax-reform plans would be enacted before year-end. Gold prices are sensitive to moves lower in the U.S. dollar – A lower dollar makes gold cheaper for holders of foreign currency, thus, increases demand. Also supporting demand for safe-haven gold was ongoing political unrest in the Middle East after Saudi Arabia advised citizens not to travel to Lebanon and urged the international community to impose fresh sanctions on Iran.

Crude oil on MCX settled up 1.16% at 3738 amid ongoing unrest in the Middle East while Saudi Arabia’s plan to slash crude exports lifted sentiment. Saudi Arabia plans to cut its crude exports by 120,000 barrels per day in December compared with November, slashing allocations to all regions, Reuters reported Thursday, citing an energy ministry spokesman. The reports of Saudi’s plan to reduce exports came as investor fears grew of instability in the Middle East after Saudi Arabia warned its citizens not to travel to Lebanon and urged the international community to impose fresh sanctions on Iran. The escalating tensions between Saudi Arabia and Iran come after Saudi Arabia’s crown prince Mohammed bin Salman accused Iran of “direct military aggression” by supplying Houthi rebels in Yemen with missiles, one of which was fired towards the Riyadh on Saturday. Crude prices remained on track for fifth straight weekly win despite a report showing that U.S. crude supplies rose last week last week. Goldman warned of greater price volatility ahead due to increasing tensions in the Middle East, especially between OPEC fellows but political arch-rivals Saudi Arabia and Iran, along with soaring U.S. oil production. OPEC is due to discuss output policy during a meeting on Nov. 30, and it is expected it will extend the cuts beyond the current expiry date in March 2018.

Copper on MCX settled down -0.15% at 444.45 recovered from the day's low as dollar slipped as investors fretted over a Republican tax plan that would delay corporate tax cuts. Copper prices have risen some 24 percent so far this year to average $2.75 per pound, helped by strong growth in China, which accounts for about 40 percent of the roughly 23 million tonnes of copper consumed each year. Support also seen as Chile, which produces about a third of the world’s copper, has adjusted its market deficit forecast for this year to 60,000 tonnes, the minister said, adding the shortfall is expected to persist throughout 2018, peaking in the second half. Meanwhile China's unwrought copper imports fell in October from a month earlier to their lowest since April, as prices soared to their highest in more than three years, while concentrate arrivals also slipped, customs data showed. Arrivals of unwrought copper, which includes anode, refined, and semi-finished copper products, stood at 330,000 tonnes last month, up from 290,000 tonnes a year ago, but down from 430,000 tonnes in September, according to the data from the General Administration of Customs. Imports for the first 10 months of the year were 3.76 million tonnes, down 7.8 percent from the same period in 2016, customs said. Copper concentrate imports came in at 1.37 million tonnes in October, the lowest since May. Imports were down from 1.47 million tonnes in September, but up from 1.36 million a year ago. 

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