BULLION - MCX Gold and Silver may note some decline tracking cues from international exchange but downside is limited. Domestic gold price rallied over 1% Friday to cover up the gap between domestic and international price. Domestic gold price were trading at a discount of nearly $15/oz ahead of Budget amid expectations that Indian government will cut import duty. With no announcement of duty cut and weakness in rupee amid fiscal concerns, MCX gold price rallied. The discount has now narrowed to nearly $3/oz. With budget out of way, domestic gold price may move more in sync with international markets.
ENERGY- Crude Oil- MCX Crude may note mixed trade in line with international market but bias may be on the upside. NYMEX crude trades in a narrow range near $55 per barrel after a 2.7% gain in previous session. Supporting crude price is much bigger than expected rise in US jobs last month which rekindled optimism about health of US economy. Also supporting price is decline in US crude oil rig count which shows weakening production interest. The number of rigs drilling for crude oil fell by 15 to 847 rigs last week. Also supporting price is reports of decline in OPEC�s production last month which shows good adherence to production cut deal. US sanctions on Venezuela will also affect exports from the nation. Crude has managed to gain despite slowdown in Chinese economy, lack of major breakthrough in US-China trade talks and record high US crude production. Russian crude output has declined however the cut is much less than target levels. Crude may trade with a positive bias as OPEC�s production cuts continue to keep supply tightness concerns high. Focus will continue to be on health of US and Chinese economy and development relating to OPEC.
Natural Gas- Natural Gas- MCX Natural gas may note some decline tracking cues from international exchange. NYMEX natural gas trades weaker near $2.7/mmBtu after a 2.8% decline in previous session. Weighing on gas price is forecast of milder weather in US over coming days which will keep a check on heating demand. US EIA weekly report was also mixed as it noted a smaller than expected decline in stocks but which was well above 5-year average. Also weighing on gas price is higher US gas production and rise in rig count. The number of rigs drilling for natural gas rose by 7 to 198 rigs. Natural gas has been falling for last few days amid weakening demand outlook and this trend may continue unless we see fresh spurt in demand.
BASE METAL - Base metals on LME trade sideways to lower today following positive close last week. LME Nickel was the best performer with 5.8% gains followed by 3.9% rally in Zinc prices. In other metals, Copper and Lead ended the week with 1.4% and 0.85% gains respectively however Aluminium closed 1.9% lower. The metals pack trades sideways to lower in early trades today amid lack of cues from China as the Chinese markets are closed for week long Lunar New Year Holidays. On weaker note weighing on the prices is growing worries over deepening slowdown in top consumer China along with uncertainty over US-China trade deal. In top consumer China, data last week showed that manufacturing activity continued to contract in January with Caixin Mfg. PMI falling to Feb 2016 low of 48.3 as against market expectation of 49.5 and December�s reading of 49.7 while official PMI too remained below 50 level mark that divides growth from contraction.
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