MCX MORNING NEWS UPDATES - 11 jun 2018

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Gold firmed as a rise in risk aversion ahead of G7 talks lent support, but the metal remained hemmed within a range -   

Gold prices look likely to remain vulnerable ahead of the upcoming Federal Reserve meeting on Wednesday, when it is widely expected to raise interest rates in what would be its second rate hike this year. Expectations for higher interest rates tend to be bearish for gold, which struggles to compete with yield-bearing assets when rates rise. The week will also bring updates on U.S. inflation, retail sales and industrial production. But the yellow metal could find some support from safe haven buying amid heightened trade tensions as markets digest the fallout from a contentious weekend G7 summit meeting in Canada. President Donald Trump said Saturday the U.S. wouldn’t endorse the final communiqué released at the end of the summit, blasting what he called Canadian Prime Minister Justin Trudeau's "false statements" at a news conference.

Domestic fundamentals to provide limited support to zinc price - 

Despite buoyance from LME prices, Chinese domestic zinc price is unlikely to see much more upward room with limited support from weaker fundamentals, SMM believes. The SHFE 1808 zinc contract traded range bound on the morning of Monday June 11 after touching a high at 24,510 yuan/mt. Supply of zinc is set to grow in June as smelters underwent maintenance last month are scheduled to resume operations, SMM learned. The domestic market has also continued to see inflows of imported zinc since the import window opened in April and May. 

Chinese alumina prices accelerate decline as sellers offload spot cargoes - 

The decline of Chinese domestic alumina prices accelerated last week as alumina producers in Shanxi and Henan province as well as major traders began to sell spot cargoes, SMM learned. This followed a decline of 67 yuan/mt the previous week. The slow pace of export shipments leaving the port in Guangxi also increased the possibility of them being sold in the domestic market, which may further suppress domestic alumina prices. SMM learned that switching bag-packed alumina into bulk loaded cargoes and limited port capacity slowed down the exports.

Oil Mixed Amid Rising Russian Production, Strong Demand In Asia - 

Oil prices were mixed on Monday amid rising Russian production and strong demand in Asia.Russia's oil production rose to 11.1 million bpd in early June, up from slightly below 11 million bpd in most of May, Russian news agency Interfax reported over the weekend. Prices were also pressured by another jump in the number of rigs drilling for new oil production in the United States, which suggested U.S. crude oil output would rise further. "Non-OPEC supply is expected to rise sharply in 2019 led by US shale growth along with Russia, Brazil, Canada and Kazakhstan," said JPMorgan (NYSE:JPM) in its quarterly outlook, adding that it was bearish for the oil markets in the second half of the year.




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