MCX Daily Report : 22 june 2018

Gold Prices Move Off Lows as Dollar Rally Stalls.

Gold prices eased from fresh lows for the year as the dollar turned negative on weaker U.S. economic data. A sharp retreat in the dollar – from its highest level since last summer – supported a recovery in gold but sentiment remained negative amid expectations a more aggressive Fed rate-hike cycle would continue to spur demand for the greenback. Following the Fed's rate hike last week, and more hawkish outlook on rate hikes, gold prices have slipped 3%, as traders bet that the divergence between the Fed's hawkish outlook on monetary policy relative to other central banks will drive demand for the greenback. "The divergence between U.S. and rest of the world monetary policy will support longer and greater USD strength than we had anticipated," Barclays (LON:BARC) said in a note to clients.

Zinc import window unlikely to reopen end-Jun as yuan declines.

The import window for zinc is unlikely to reopen in late June as the yuan depreciates, SMM believes. The import window opened briefly in the middle of the month. Import losses will widen if the yuan continues to weaken against a strong US dollar. The yuan has declined since the middle of April as US-Sino trade tension grew. As of June 21, the yuan stood at 6.47 against the US dollar. SMM also believes that potential arrivals of imported zinc in the following days are likely to be directed to bonded areas given the current glut.

 Further potential price declines deter Shanghai spot nickel buyers. Purchasing interest among downstream consumers in Shanghai's spot nickel market cooled on Thursday June 21 from June 20, as most market participants believed that prices of futures would decrease further, SMM learned. Prices of futures rose in the morning and spot premiums edged down 100 yuan/mt from the previous day. Downstream consumers were keen to inquire about prices but held back from purchasing in anticipation of further declines. On Thursday June 21, most transactions in Shanghai were heard at 116,050-116,450 yuan/mt. Norilsk nickel traded at a premium of about 600 yuan/mt against the Wuxi Stainless Steel Exchange 1807 contract, while Jinchuan traded at a premium of about 700 yuan/mt.

Oil Prices Rise Ahead of Key OPEC Meeting

Oil prices climbed more than 1% on Friday, with all eyes on OPEC and its allies as they meet in Vienna later on Friday.The Organization of the Petroleum Exporting Countries (OEPC), a producer cartel de-facto, is meeting with some non-OPEC members including Russia in Vienna later today to discuss possible crude output hike. The group started withholding supply in 2017 to prop up prices. Saudi Arabia and Russia, both of which have the ability to increase production, are opting for a substantial output hike.

Meanwhile, countries without spare capacity, including Iraq, Iran and Venezuela, prefer to keep the supply limits in place. It was reported earlier this week that China is considering to impose tariffs on U.S. crude imports. The 25% duty on U.S. crude imports, should it be implemented, could potentially make American oil uncompetitive in China.

MCX Crude Oil July on Thursday as seen in the daily chart opened at 4479 levels and day high of 4504 levels. During this period price corrected & made day low of 4385 levels finally closed at 4496 levels. Now, there are chances of further upside movement technically & fundamentally.

 Ahead of the meeting, Saudi Arabian Energy Minister Khalid al-Falih said on Friday that OPEC and non-OPEC members were close to agreeing on a deal to raise oil production.

 "The actual decision by OPEC and its partners – which may not actually become apparent until Saturday – is the big one traders are watching," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

 Oil prices were under pressure earlier this week after U.S. President Donald Trump said on Monday that he has ordered the U.S. Trade Representative to identify $200 billion worth of China goods for additional tariffs, escalating a trade dispute between the world’s two largest economies.


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