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CAPITALSTARS – MCX COMMODITY EVENING MARKET NEWS UPDATES – 04 Dec 2018

CS MCX Commodity Evening mkt updates

BULLION:-

Gold prices gained on Tuesday, after hitting a more than one-month high earlier in the session, as the dollar slipped after the United States and China agreed to a temporary truce in their trade conflict that rattled global markets. “After the G20 summit safe haven buying in the $ index has reduced therefore gold is looking very strong,” said Vandana Bharti, assistant vice-president of commodity research, SMC Comtrade Ltd, adding $1,250 is the next target for the bullion. The dollar weakened against its major peers on Tuesday, as the thaw in trade tensions between Washington and Beijing supported investor confidence in riskier assets, while the greenback was further pressured by U.S. Treasury yields that fell to three-month lows. Analysts now expect market focus to move to the U.S. Federal Reserve’s monetary policy. Markets are expecting a fourth rate hike at its Dec. 18-19 meeting. Gold has fallen about 10 percent from a peak in April as investors preferred the dollar as safe haven, with U.S.-China trade friction unfolding against a backdrop of higher U.S. interest rates. The precious metal is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion. They also boost the dollar, in which the metal is priced. “Participants will be keying in on policy language and the subsequent Powell news conference to see if there is any “walking back” of Powell’s “neutral” remarks,” INTL FCStone analyst Edward Meir said in a note. The dollar came under pressure last week, making bullion cheaper for holders of other currencies, when the market took comments by Fed Chair Jerome Powell as hinting at a slower pace of rate hikes. (gold) is very close to taking out key resistance at $1,240/ounce. Should that level give away, we could see a modest flurry of fund activity setting in,” Meir added. Meanwhile, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.46 percent to 758.21 tonnes on Monday. other precious metals, palladium had gained about 1 percent to $1,215.67 per ounce, having hit a record high of $1,221.95 in the previous session.

ENERGY:-

Oil prices rose more than 2 percent on Tuesday, extending gains ahead of expected output cuts by producer cartel OPEC and a mandated reduction in Canadian supply.
Both benchmarks climbed around 4 percent on Monday after U.S. President Donald Trump and Chinese President Xi Jinping agreed at a meeting of the Group of 20 industrialized nations (G20) to pause an escalating trade dispute. market seems positively oriented following the G20 developments and heading into the OPEC meeting on Thursday,” BNP Paribas commodities strategist Harry Tchilinguirian told Reuters Global Oil Forum. The Middle East-dominated Organization of the Petroleum Exporting Countries will meet on Thursday in Vienna to agree future output and will discuss strategy with other producers outside OPEC, including Russia. OPEC and its allies are working towards a deal to reduce oil output by at least 1.3 million barrels per day (bpd), OPEC sources have told Reuters, adding that they were still talking to Russia about the extent of its production cuts. expect OPEC to follow suit and agree to a production cut in Vienna this coming Thursday,” U.S. bank Goldman Sachs said in a note to clients. “A cut in OPEC and Russia production of 1.3 bpd will be required to reverse the ongoing counter-seasonally large increase in inventories.” It added that it expected a joint effort by OPEC and Russia to withhold supply to push Brent oil prices “above the mid-$60 per barrel level”. Helping OPEC in its efforts to rein in emerging oversupply was an order on Sunday by the Canadian province of Alberta for producers to scale back output by 325,000 bpd until excess crude in storage is reduced. biggest problem is surging production in the United States where output, mostly from its southern shale fields, has grown by around 2 million bpd in a year to more than 11.5 million bpd. C-OUT-T-EIA. Barclays bank pointed out in a note to clients that oil production in the state of Texas alone “reached 4.69 million bpd in September, compared with Iraqi output of 4.66 million by our estimates”.

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