Zinc prices gained tracking firmness in LME prices amid fears of supply shortages

Gold prices rose as U.S. data showing solid home sales but a fall in mortgage applications pushed the dollar to a two week low - Gold on MCX settled up 0.31% at 28493 as U.S. data showing solid home sales but a fall in mortgage applications pushed the dollar to a two-week low. Gains were limited by a rise in U.S. bond yields to nine-month highs after the Senate passed the country’s biggest tax reforms in 30 years. A weaker dollar makes gold cheaper for holders of other currencies, which can stimulate demand, but higher bond yields reduce the appeal of non yielding bullion. President Trump tweeted that he will hold a press conference on Wednesday in case the plan was finally approved in the House. The Senate passed the tax reform bill, and if the House of Representatives passes it as well today - as expected, it will go for President Donald Trump to sign into law.

Oil dips as U.S. production fast approaches 10 million bpd– Oil prices dipped on Thursday as soaring U.S. output, fast approaching 10 million barrels per day (bpd), outweighed a drop in American crude inventories. Outweighing this on Thursday was another increase in American crude oil production, while a rise in gasoline stocks pointed to a slowdown in demand. The energy minister of Saudi Arabia, the world's top crude exporter and OPEC's de-facto leader, said it would take more time to rein in a global supply overhang, which was created by strong global production increases in the years up to 2015. "We expect the first few months of 2018 to be either flat or a build (in inventories) as it is typically the case with the seasonality with the oil market," Khalid al-Falih told Reuters on Wednesday. This brings U.S. output close to that of top producers Saudi Arabia and Russia, which pump around 10 million and 11 million bpd, respectively. Oil traders this week also eyed with interest the passing of a U.S. tax bill, which is seen to weigh on crude prices in the longer term.

Zinc prices gained tracking firmness in LME prices amid fears of supply shortages - Zinc on MCX settled up by 0.17% at 205.70 on fresh buying and getting support from LME Zinc which ended up 0.5 percent at $3,218 a tonne as support seen after leaders at an economic planning meeting said Beijing will deepen structural reforms and curb risks to the financial system while maintaining steady growth in 2018. While sentiments improved for Zinc as the global demand for zinc goes up, its supply is going down. This shortfall is mainly attributed to cuts in zinc production in the big miners of zinc, particularly Glencore. China, one of the major suppliers of zinc, has also cut production in its mines. Also closures of zinc mines in recent years, including Century in Australia and Lisheen in Ireland. As for the stockpiles of zinc, projects that these would be depleted by the middle of 2017.

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