Economic Buzz: Japan May Housing Starts Rise 14.50%

Ministry of Land, Infrastructure and Transport said that Japanese Housing Starts rose to a seasonally adjusted 14.5%, from 5.8% in the preceding quarter. Analysts had expected Japanese Housing Starts to rise to 6.2% in the last quarter.
Source by Commodity Insights

Economic Buzz: Japan's May Unemployment Rate Remains Steady At 4.10%

The Statistics Bureau said that Japan's employment during the May month remained unchanged at a seasonally adjusted 4.1%, from 4.1% in the preceding month. Analysts had expected the rate of unemployment to fall to 4.0% last month.
Source by Commodity Insights

Commodities Buzz: US Wheat Prices Tumble To One And Half Year Low

The Wheat prices in Chicago tumbled to one and half year low yesterday amid a general weakness in commodity prices as dollar gains hurt the sentiments. There are indications that the early harvest from southern Europe and Russia would turn into a season with improving yields in grains.

The head of Russia's Grain Producers' Union said on Wednesday that the official forecast wheat would fall short of the farm ministry's 95m-tonne target though the early harvest results showed early wheat yields at 4.28 tonnes per hectare, up around 1 tonne per hectare above the results a year ago. Barley yields are also seen up 1.5 tonne per hectare at 5.24 tonnes per hectare.

Farmers across the world are forecast to harvest 682.1 million tons of wheat in 2013-14, up 4.1% compared to a 2012-13 crop estimated at 655.1 million tons according to the International Grains Council (IGC). Although there is continued uncertainty about harvest prospects in some major producers, global wheat availabilities are still set to be ample over the year ahead, the IGC has noted.

Chicago wheat futures for July slipped more than a percent to $6.67 a bushel - the contract's weakest finish since November 2011.
Source by Commodity Insights

Economic Buzz: India's Current Account Deficit Falls To 3.6% Of GDP In March Quarter

India's current-account deficit stood at $18.1 billion, or 3.6% of gross domestic product, in the first three months of the year, data from the Reserve Bank of India showed Thursday. The country's current-account deficit narrowed sharply between January and March following the record gap in the previous three months. It stood at $32.6 billion, or 6.7% of gross domestic product, in the October-December quarter. For the financial year that ended March 31, the deficit stood at $87.8 billion, or 4.8% of GDP. It widened from $78.2 billion, or 4.2% of GDP a year earlier, the RBI said.
The data was released earlier than expected--it was originally due Friday evening. Currency market dealers say the RBI may have released the data ahead of schedule to support the rupee, which sank to a new low Wednesday.
The Indian rupee has weakened more than 11% since May as global investors have rushed into dollar-denominated assets on expectations that the U.S. Federal Reserve will soon roll back a massive stimulus program that has injected billions of dollars into the global financial system. On Wednesday, the rupee touched its all-time low of 60.73 per dollar due to defence and crude oil related demands. The Reserve Bank of India (RBI) intervened to check rupee's further slide at 59.90/USD. The central bank was actually trying to resist it from breaching the Rs 60/$ level. Meanwhile, the finance minister P Chidambaram on Tuesday said that there was no need to react and panic over the rupee's fall. India has been struggling with a weak external sector, with foreign investment proving insufficient to bridge the wide current-account gap quarter after quarter, highlighting the fragile state of Asia's third-largest economy.
Source by Commodity Insights

Economic Buzz: Fitch Slashes Its Forecast On China's 2013 Growth To 7.5%

Fitch Ratings on Wednesday cut its forecast on China's 2013 economic growth to 7.5% from its previous projection of 8% in March. The new forecast put the rating agency's outlook on China more in line with the consensus, and also matches the Chinese government's own target for the year. Fitch said that for 2014, it sees China's gross domestic product also rising 7.5%, slowing to 7% growth in 2015. Goldman Sachs, HSBC, Bank of America-Merrill Lynch and Crédit Agricole have all recently cut their growth projections for China, with Credit Suisse saying the Chinese economy might slow to 6% expansion in the year ahead.
Source by Commodity Insights

Indian Rupee Remains Weak

The Indian rupee fell against the dollar in early trade on Wednesday, June 26, 2013 on account of increased demand for the US currency from importers. Local shares also remained more or less choppy despite improved sentiments among its regional peers. The domestic currency opened weaker by 6 paise at Rs 59.72 to a dollar and slipped further to a low of 59.90 so far during the day. In the spot currency market, the Indian unit was last seen trading at 59.87, lower by around 59.66.
Rupee gained marginally on Tuesday on some dollar selling related to arbitrage gains with the offshore non-deliverable forward market, but sentiment remained fragile after a steep foreign sell-off of stocks and debt. Expectations the Reserve Bank of India will step in when the rupee approaches 60 to the dollar have also prevented the rupee from falling too much after it touched an all-time low of 59.9850 on Thursday last week.
Domestic key benchmark indices opened higher on mostly positive Asian stocks only to pare gains later. Asian shares edged higher to reverse a four-day losing streak on Wednesday as investors took comfort from firm U.S. data underscoring an American recovery, and assurances from China's central bank to provide funds to institutions if needed. Foreign institutional investors (FIIs) sold Indian shares worth a net Rs 1285.86 crore on Tuesday, 25 June 2013, as per provisional data from the stock exchanges. At the time of writing, the S&P BSE Sensex was up 19.01 points or 0.1% to 18,648.16 while the CNX Nifty was up 13.55 points or 0.24% to 5,622.65.
The U.S. dollar was back on the front foot in Asia on Wednesday after the latest batch of U.S. economic data supported the Federal Reserve's recovery view and lifted U.S. Treasury yields.
Source by Commodity Insights

Commodities Buzz: UK Potato Plantings Slump To One-Decade Low

UK farmers have reduced potato plantings to their lowest in at least a decade, diverting from a general trend in Europe. Potato plantings in Britain stand at 121,200 hectares, down marginally compared to the last year though it would be the smallest area since at least 2003, and represents the fifth drop in plantings in the last six years, the AHDB crop bureau said in its first forecast for the 2013 crop.

It also bucks the trend of a rise of some 3-4% estimated for Europe's big northwestern potato growing countries as a whole, after poor harvests last year in many regions, which have curtailed supplies and underpinned prices.

In France, where processing potatoes rose more than seven-fold in the year to the end of May, potato inventories were, at the close of April, down 35% year on year, according to industry data.
Source by Commodity Insights

Copper Finally Bounces On LME

Copper......

Copper prices finally bounced on Tuesday and settled at $ 6767 per tonne, up $ 90 per tonne. Investor sentiment brightened Tuesday after the People's Bank of China said interbank liquidity risk is largely under control and volatility is temporary. Chinese markets were suffering from liquidity crisis that was softening the metals.
China's money markets have been plagued by a cash shortage in recent weeks, making life tough for corporate borrowers and bringing the closely associated bond market to a virtual standstill. The cash squeeze has added to jitters about economic growth in China, which accounts for around 40% of global demand for copper.
U.S. consumer confidence rose to 81.4 last month, up from 74.3, according to the Conference Board, marking its highest level since January 2008. Economists had only expected a reading of 74.
The S&P/Case-Shiller index also set records for its month-over-month increase, while durable goods orders expanded ahead of expectations. New homes sales, meanwhile, rose to their highest level in nearly five years in May.
MCX Copper settled at Rs 403.45 per kg, up 0.66 percent. The prices tested a high of Rs 406.95 per kg and a low of Rs 393.3 per kg. Meanwhile steel material Nickel settled at Rs 826.6 per kg, up 1.21 percent.
Source by Commodity Insights

LME Copper Recovers From Three Year Lows

Copper........
LME Copper recovered from the three year lows as investors turned on to buy for bottom fishing. LME 3-month copper is 1.1% higher at $ 6745.25 per tonne. Copper's recent losses were overdone. The market should remain supported by the recent stoppage at Freeport-McMoRan Copper & Gold Inc. (FCX) Grasberg mine in Indonesia, he says. Although open pit mining at Grasberg has resumed, it will take a while for output to fully ramp-up.
The euro edged higher against the dollar on Monday after officials from the Federal Reserve downplayed market concerns over prospects of an end to the central bank's easing policies. Dallas Fed President Richard Fisher also downplayed market jitters over tapering as overdone.
Spain sold EUR930 million of three-month bonds at average yield of 0.86%, up from 0.33% previously and EUR2.14 billion of nine-month bonds at an average yield of 1.44%, up from 0.78%. Italy auctioned EUR3.5 billion of two-year bonds at an average yield of 2.4%, up from 1.1% previously.
MCX Copper June expiry was trading at Rs 403.25 per kg, up 0.61 percent. The markets tested a high of Rs 404.9 per kg and a low of Rs 393.3 per kg. The prices are expected to find stiff resistance at Rs 405 per kg as they move up. Inventories of Copper gave a sigh of relief to the investors as they moved down by 3375 tonnes to 674850 tonnes.
Source by Commodity Insights

Indian Rupee Marginally Stronger

The Indian rupee commenced marginally higher on Tuesday, June 25, 2013, consolidating from recent losses against US dollar, although it was still lingering close to its record lows. Besides dollar selling by exporters, a higher opening in domestic equity market helped the rupee to strengthen. Investors are now awaiting the release of the current account deficit data on Friday. The domestic currency opened higher by 6 paise at Rs 59.6125 and inched up to hit an intraday high of 59.60 before dropping back to a low of 59.76 so far during the day. In the spot currency market, the Indian unit was last seen trading at 59.7250, weaker by around 6 paise or 0.09% as compared to previous close at 59.67.
Global markets remain weak over worries about the rollback of U.S. monetary stimulus and concerns about China's financial sector. Asian shares slipped further on Tuesday and investors braced for more volatility in Chinese markets as worries spread that tight liquidity could impede China's economic growth and take the shine off an emerging U.S. recovery. Domestic key benchmark indices alternately moved between positive and negative zone near the flat line in morning trade. Foreign institutional investors (FIIs) sold Indain shares worth a net Rs 1552.98 crore on Monday, 24 June 2013, as per provisional data from the stock exchanges. At the time of writing, the S&P BSE Sensex was down 1.44 points or 0.01% to 18,539.45 while the CNX Nifty was down 1.65 points or 0.03% to 5,588.60.
The rally in the U.S. dollar took a breather in Asia on Tuesday after two top Federal Reserve officials downplayed market fears of an imminent end to stimulus, with one saying the Fed's exit strategy was still way out in the future.
In the meantime, Crisil research expects the rupee to strengthen from current levels and settle at around 56 per dollar by end-March 2014. The appreciation will mainly be driven by resumption of FII inflows, which in turn, will be led by two factors. Firstly, the current capital flight from India is a short term phenomenon and is largely in response to the uncertainty surrounding the impact of the Federal Reserve's pullback of QE. Secondly, the government is pledging a slew of domestic policy reforms to shore up domestic and foreign investor sentiments. This will act as a pull factor for foreign capital inflows. And finally, the research firm expects current account deficit as a per cent of GDP to be lower in 2013-14 vis-à-vis last year. The key external monitorable for direction of the currency is the stance of developed countries, particularly the US, on withdrawal of quantitative easing (QE). On the domestic front, pushing through key policy reforms that will revive the economy, bolster investor sentiments and attract foreign inflows will be the key monitorable.
Source by Commodity Insights

Commodities Buzz: Goldman Cuts 2013, 2014 Gold Forecasts

Goldman Sachs Monday cut its outlook on gold prices for this year and next, citing growing price risks from a brightening U.S. economic picture.
The bank now expects gold to end this year at $1,300 a troy ounce, down 9.4% on its previous forecast. It sees gold ending 2014 at $1,050 an ounce, down 17.3% on its earlier outlook.
"Medium term, we expect that gold prices will decline further given our U.S. economists' forecast for improving economic activity and a less accommodative monetary policy stance," the bank said. "Further, with quantitative easing tapering likely to start soon, perhaps even a bit sooner than previously anticipated, we are fast forwarding on our real rate path."
Gold is traditionally viewed as a safe store of value at times of weakness in the wider market, and is sought as a hedge against inflation and currency debasement at times of loose central bank monetary policy. The price of gold plunged 6.3% in a single session last week after U.S. Federal Reserve Chairman Ben Bernanke said the U.S. central bank could start winding down its $85-billion-a-month bond-buying program later this year. He also said the bank could even cease the purchases next year if growth picks up, as the Fed projects, unemployment comes down and inflation moves closer to the central bank's 2% target. The Fed's bond-buying program has been a major support to gold prices in recent years.
Purchases of gold by central banks, meanwhile, "will not be sufficient to offset this decline in prices," said Goldman Sachs.
Central banks in emerging-market countries have increased their gold holdings over the past few years in reaction to the sovereign-debt crises affecting reserve currencies like the U.S. dollar and the euro. This has helped shore up gold prices by absorbing supply.
Lower gold prices should prompt producers to scale back production of the metal, however, and prices should therefore find longer-term support at the $1,200 an ounce level, said the bank.
Source by Commodity Insights

Mild Losses Capture Crude Oil

Oil.........

Crude oil futures are trading with mild losses in the Asia electronic session today hurt by fears over a deepening slowdown in China weighed and concerns over an end to the Federal Reserve’s asset purchase program.
Chinese stocks declined to lead most Asian markets lower today, as a recent spike in Shanghai interbank interest rates fueled worries about the world’s second-largest economy. The Hang Seng Index in Hong Kong fell 1.5%, dropping for a fifth straight session to stay close to nine-month lows, while the Shanghai Composite tumbled 2.2%.
Light sweet crude futures for delivery in August are trading down 5 cents at $ 93.64 per barrel on the New York Mercantile Exchange. It fell 1.3% Friday to settle the week at $.89 a barrel by close of trade.
Oil prices plunged 3% on Thursday after Fed Chairman Ben Bernanke said the central bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.
The bank said it expects the U.S. economy to grow between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to fall to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.
Meanwhile, concerns over China’s economic outlook also weighed after data Thursday showed that manufacturing activity hit a nine-month low in June. China’s HSBC preliminary manufacturing purchasing managers’ index fell to 48.3 in June from 49.2 in May as new orders declined, indicating that the slowdown in manufacturing is worsening.
MCX July crude oil futures may open today’s session near Rs 5600 levels with support around Rs 5550 levels.
In the coming week, investors will be closely watching U.S. data on durable goods orders, jobless claims and consumer confidence for signs that the economic recovery is on track.
Source by Commodity Insights

Gold Stays Beneath $1300; Equities Tumble

Gold............
Gold futures stayed beneath $1300 an ounce in the electronic trades today, with the Asian equities also trading lower on economic concerns.
Chinese stocks declined to lead most Asian markets lower today, as a recent spike in Shanghai interbank interest rates fueled worries about the world’s second-largest economy. The Hang Seng Index in Hong Kong fell 1.5%, dropping for a fifth straight session to stay close to nine-month lows, while the Shanghai Composite tumbled 2.2%.
Gold futures for August delivery are down $1 at $ 1291 an ounce on the Comex division of the New York Mercantile Exchange. It rose 0.75% on Friday to settle the week at $1,295.55 a troy ounce. For the week, gold prices lost 6.8%, the worst weekly decline since September 2011. The metal is likely to find support near $1250 levels with resistance near $1315 levels.
Sentiment on the precious metals was dampened amid expectations the Federal Reserve will begin to taper off its bond-buying program by the end of this year.
Gold prices plunged more than 5% on Thursday after Fed Chairman Ben Bernanke said the central bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
MCX August may open today’s session near Rs 27000 per 10 grams. In the near term the commodity may find support near Rs 26700 levels and resistance near Rs 27800 levels.
In the coming week, investors will be closely watching U.S. data on durable goods orders, jobless claims and consumer confidence for signs that the economic recovery is on track.
Any improvement in the U.S. economy could scale back expectations for further easing, putting upward pressure on U.S. yields and boosting the dollar.
Source by Commodity Insights

Gold Up After Meltdown, COMEX Futures Still Under $1300

Gold.........

MCX Gold futures found a floor today as global prices edged up after a massive spate of selling in last two sessions. The yellow metal tumbled to fresh two and half year lows under $1270 per ounce today on worries about a possible tapering of the asset purchases by the US Fed. However, the metal launched a recovery in electronic moves as European stocks edged up and bargain hunters chipped in. The commodity quotes at $1292.90, up $6.70 per ounce on the day right now.

Gold has been hit very hard this week as the Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank may start to scale back its asset purchases later this year if the economy continues to strengthen, as the central bank expects. The Fed, which kept monetary policy on hold after a two-day meeting, signaled greater optimism about the economy, forecasting that the unemployment rate could fall to 6.5% by 2014, one year sooner than the central bank had previously estimated.

While this made most of the risky assets take a lot of drubbing, the US dollar marched upwards. Dollar hit a two-week high of 1.3161 against the Euro yesterday before easing slightly today. The equities also paced up in Europe after St. Louis Fed President James Bullard stated that the decision by Federal Reserve to lay out its plan to reduce the pace of asset purchases over the next year was badly timed.

In a statement explaining his dissent from the Fed's policy statement, Bullard said the central bank should have waited for more tangible signs that the economy was healing and that inflation was no longer moving lower. He noted that the Fed trimmed its own forecast for GDP growth and inflation in 2013 and made investors turn around from the downward swoon witnessed after the Fed meet.

This is supporting gold too. However, with an all-important trigger of $1300 having already broken in a convincing manner, room for upside gains looks limited for gold. The yellow metal might endure another sell off if this mark fails to overcome in evening. MCX Gold futures slipped today but were largely in a tight range, as the Rupee remained weak. MCX Gold futures for August moved in a corridor of Rs 26727-26957 per 10 grams and currently trade at Rs 26776, down Rs 93 per 10 grams or 0.35% on the day with 5.25% increase in the open interest.

Source by Commodity Insights

Oil Crawls Back To Gains

Oil...........

Crude oil futures crawled back to gains in the Asia electronic hours today after falling to 7 month lows yesterday hurt by the slowdown in China manufacturing and signals from the Federal Reserve that a reduction in monetary stimulus is in sight.

Equity markets continued to shed however commodities got a ray of hope from softness in the US dollar today. Crude for July delivery is trading up 15 cents at $ 95.29 per barrel on the New York Mercantile Exchange. Yesterday it lost $2.84, or 2.9%, to settle at $95.40 a barrel. Thursday’s decline was the largest since Nov. 7, 2012. The July contract will expire at the end of Thursday.

The ICE dollar index had edged down to 81.642 by late morning in East Asia, from its 81.823 level late Thursday. The dollar had rallied since the Federal Reserve’s statement late Wednesday, signaling it could slow its asset purchases this year if the economy improves further.

A weaker U.S. currency tends to support gold and other dollar-denominated commodities, as it makes them less expensive for holders of euros, yen and other units.

The weakness in the Asian equities may however put some pressure on crude oil later in the session. Asian stocks fell Friday after the Federal Reserve’s plans to gradually wind down its bond purchases led to heavy losses on Wall Street, but Chinese shares recovered from their sharp initial declines as Shanghai interbank rates reportedly came off their highs.

The Shanghai Composite traded 0.5% lower, and Hong Kong’s Hang Seng Index was off 1% by mid-morning trade in the respective markets. Both benchmarks had dropped more than 2% in early trading, but pared those losses on reports of a sharp fall in the Shanghai interbank money-market rates from the record highs they touched the previous day.

MCX July crude oil futures may open today’s session near Rs 5770 levels with resistance near Rs 5805 levels and support near Rs 5695 levels.

Powered by Commodity Insights

Copper Now At 20 Month Lows On LME

Copper........

Copper

got crushed to a 20 month low against the LME on Friday due to lack of supports from Dollar, China and US Fed in a span of two days. US Federal Reserve has made its intention clear that they will cut back on the support to the economy through stimulus measures later this year. The whole set of data were on the negative side. In China, the PMI numbers that were eagerly awaited dejected the traders. Chinese PMI numbers slipped to nine month lows.

In currency markets, the talks of Indian Rupee touching 60 mark were all over the news. Rupee managed to recover from the slaughter in the hands of Dollar and ended at 59.58. The Rupee was 59.66 when last seen. Euro/Dollar pair ended at 1.3223 from 1.3295 on Wednesday.

Aluminium declined to three and half years low to settle at $ 1794 per tonne, down $ 42 per tonne. MCX Aluminium closed at Rs 105.7 per kg, marginally up. This was due to the weakness in Indian Rupee that has made imports more costly.

China refined Aluminium production in January-April 2013 was 7 million tonnes, up 18 percent from 6.22 million tonnes in January-April 2012 as per WBMS estimates. China produced 44 percent of total Aluminium produced in the world. China production of refined Aluminium in April was 1.79 million tonnes, from 1.70 million tonnes in March 2013.

Refined production of Aluminium in US was 665300 tonnes in January-April 2013, down by 4.8 percent from similar period last year. Production in April was down to 5300 tonnes compared to 166800 tonnes in March 2013.

LME Copper closed at $ 6835 per tonne, down $ 168 per tonne. MCX Copper June contract closed at Rs 404.75 per kg, down Rs 4. WBMS estimated that China refined copper production was 2.10 million tonnes in January-April 2013 compared to 1.80 million tonnes in similar period last year.

Meanwhile, World refined copper consumption was 6.73 million tonnes in first four months of the year compared to 6.89 million tonnes in January-April 2012. Chinese refined copper consumption was 2.79 million tonnes in January-April 2013, compared to 2.96 million tonnes in January-April 2012.

Source by Commodity Insights

Aluminium In Surplus Of 423000 Tonnes In Jan-Apr-2013: WBMS

Aluminium......
World Bureau of Metals Statistics (WBMS) has come up with its numbers for major metals. The agency has said that World Aluminium markets were in surplus of 423000 tonnes in the first four months of 2013, up 3.1 percent compared to a surplus of surplus of 410100 tonnes in first four months of 2012.
Aluminium was in surplus of 548800 tonnes in whole of 2012. On a monthly basis, Aluminium markets recorded a surplus of 24000 tonnes in April 2013, down 85 percent compared to a surplus of 163600 tonnes in the month of March. The closing stocks of Aluminium at the end of April were 7.28 million tonnes, down from 7.4 million tonnes in the month ending March 2012.
World primary Aluminium production in April 2013 was 3.97 million tonnes, up 1.8 percent from 3.90 million tonnes in March 2013. In January-April 2013, World mined Aluminium production was 15.68 million tonnes, up 5.5 percent compared to 14.86 million tonnes in January-April 2012.
China refined Aluminium production in January-April 2013 was 7 million tonnes, up 18 percent from 6.22 million tonnes in January-April 2012. China produced 44 percent of total Aluminium produced in the world. China production of refined Aluminium in April was 1.79 million tonnes, from 1.70 million tonnes in March 2013.
Refined production of Aluminium in US was 665300 tonnes in January-April 2013, down by 4.8 percent from similar period last year. Production in April was down to 5300 tonnes compared to 166800 tonnes in March 2013.
Refined production of Aluminium in EU27 was 665300 tonnes in first four months of the year, down 4.8 percent than 699200 tonnes in first four months of 2012.
Meanwhile, World refined Aluminium consumption was 15.11 million tonnes in January-April 2013, up 5.5 percent from 14.31 million tonnes in January-April 2012. Chinese refined Aluminium consumption was 5.16 million tonnes in January-April 2013, up 9.3 percent from 4.72 million tonnes in January-April 2012. China consumed 46.5 percent of total Aluminium consumed in the world.
Refined consumption in US increased by 5.8 percent to 1.64 million tonnes in January-April 2013 compared to 1.55 tonnes in similar period last year. Consumption of EU 27 was 2.13 million tonnes in January-April 2013, from 2.11 million tonnes in January-April 2012.
Source by Commodity Insights

Crude Cracks Down On Tapering News

Crude........

Crude oil futures also cracked down along with the stock market after the Federal Reserve signaled it may wind down its bond purchases if the U.S. economy continued to improve.
The Fed, which kept monetary policy on hold after a two-day meeting, signaled greater optimism about the economy, forecasting that the unemployment rate could fall to 6.5% by 2014, one year sooner than the central bank had previously estimated.
Asian stocks fell Thursday as data showed Chinese manufacturing activity deteriorating further in June, adding to the selling pressure after the Fed revealed that the central bank may start to scale back its asset purchases later this year if the economy continues to strengthen.
The Hang Seng Index dropped to a nine-month low during the session, and was down 2.4% by late morning in Hong Kong, while the S&P/ASX 200 fell 2.2% in Sydney. The Shanghai Composite Index, which ended at a six-month low on Wednesday, dropped a further 1.5%.
The "flash" version of HSBC manufacturing Purchasing Managers' Index fell to a nine-month low of 48.3, down from May's final reading of 49.2. The subindex measuring output swung from expansionary territory to an eight-month low of 48.8, while those for overall new orders and for new export orders both showed an accelerating decline.
NYMEX light sweet crude oil futures for August delivery is trading down $1.36 at $ 97.12 per barrel. Yesterday, it fell 20 cents, or 0.2%, to settle at $98.24 a barrel on the New York Mercantile Exchange.
At 10:30 a.m. Wednesday, the U.S. Energy Information Administration (EIA) reported that supplies rose by 300,000 barrels for the week ended June 14, to 394.1 million barrels. A Platts survey of analysts forecast a 1 million-barrel decline, and the American Petroleum Institute said late Tuesday that crude supplies dropped by 4.3 million barrels.
MCX July crude oil futures may open today’s session near Rs 5740 levels with support around Rs 5700-5650 levels.
Source by Commodity Insights

Gold Gets Slammed As Fed Hints Tapering

Gold............

Gold futures got slammed below the crucial mark of $1340 an ounce in the Asia electronic trades today after the Federal Reserve Chairman Ben Bernanke revealed that the central bank may start to scale back its asset purchases later this year if the economy continues to strengthen.
The Fed, which kept monetary policy on hold after a two-day meeting, signaled greater optimism about the economy, forecasting that the unemployment rate could fall to 6.5% by 2014, one year sooner than the central bank had previously estimated.
The Fed’s newly revised forecast and Bernanke’s comments slammed U.S. financial markets. Stocks on Wall Street ended sharply lower and the 10-year Treasury yield surged to 2.33%, its highest level since March 2012.
Bernanke, speaking in a news conference after the Fed meeting, tried to decouple a tapering of its asset purchases from any hike in short-term interest rates. The Fed has said it would keep rates close to zero so long as the jobless rate, now at 7.6%, was above its 6.5% threshold.
And the Fed chairman stressed the bank won't start to hike rates even once its economic targets are met. He said the bank has to be convinced the economic recovery is on a solid upward path before it starts to pull back.
US August bullion futures were smashed to hit the low of $1338.6 an ounce on COMEX division of New York Mercantile Exchange.
MCX August gold futures may open today’s session near Rs 27600 levels with support around Rs 27400-300 levels.
Source by Commodity Insights

Economic Buzz: German ZEW Economic Sentiment Improves In June

The ZEW Center for Economic Research said that its index of German economic sentiment rose by 2.1 points to 38.5 in June from May's reading of 36.4. Analysts had expected the index to rise by 1.7 points to 38.1 in June. The current situation index declined unexpectedly to 8.6 in June from 8.9 in May, compared to expectations for an increase to 9.5.

Source by Commodity Insights

Economic Buzz: Increased Domestic Production Of Oil, Coal & Restraining Gold Consumption Can Contain CAD Says FM

The only way to contain Current Account Deficit (CAD) is to increase the domestic production of oil & coal and restraining the consumption of gold, said the Union Finance Minister Shri P. Chidambaram. He was addressing the meeting of the Parliamentary Consultative Committee of the Ministry of Finance Monday. The Finance Minister said that in order to increase our production, we must get our policies and priorities right as long term measures. The agenda for the meeting was: 'The Current Account Deficit- Implications and Measures to Contain the Deficit.' Shri Chidambaram said that the extent of CAD and its financing are the two major concerns. He said that it is important to finance CAD than to draw from the reserves. The Minister said that the major reason for our large CAD is that we have huge dependence on import of certain items like oil, coal and gold. The Minister said that as the world economies are in recession, we cannot do much on the external factors. All European economies except Germany are in recession and so is the case with Japan and other developing economies. Only US economy is showing some signs of revival. However, India continues to remain a desired destination for FDI and FII, he added.

The Union Finance Minister Shri P. Chidambaram said that the government is looking at FDI caps to see if they are indeed serving the purpose. Otherwise the caps could be revisited, he added. Shri Chidambaram said that despite all odds, the Government was able to finance the CAD and also added around US $ 3 billion to the forex reserves in 2012-13. He expressed confidence that this year also, CAD will be financed without dipping into reserves. He further said that government is proactively working towards operationalisation of 215 stalled projects involving about Rs. 7 lakh crore, with a view to give a push to the production activity in the country.

Various members of the Committee appreciated the steps taken by the Government to contain CAD. They also lauded the Finance Minister's announcements in the recent past including his appeal to the people, to check import and consumption of gold. Some of the members suggested that foreign investors' confidence in the Indian economy needs to be restored to ensure larger inflows of FDI and FII. It was also suggested that domestic production of oil and coal should be increased by ensuring that allocated blocks for oil exploration and coal mining start production at the earliest.

Source by Commodity Insights

Indian Rupee Pares Early Gains

The Indian rupee commenced higher on Friday, June 14, 2013 after having depreciated for most part of the week, witnessing its life time low levels. The domestic unit had hit a record low of 58.98 on Tuesday before a moderate central bank intervention and comments by government officials helped the unit gain some ground. The domestic currency opened at Rs 57.78 to a dollar and hit an intraday high of 57.63 before plunging back to a low of 57.86 so far during the day. In the spot currency market, the Indian unit was last seen trading at 57.83, higher by around 16 paise or 0.28% as compared to previous close at 57.99.
Rupee recovered a large part of its losses on Thursday, helped by dollar sales from a corporate and exporters, but disappointment over lack of any specific measures from the government prevented a further rise.
The U.S. dollar remained in the doldrums in early Asian trade on Friday, having slumped to a fresh four-month low against a basket of currencies as a bounce-back in global equities saw investors favour the euro and commodity currencies.
Key benchmark indices edged higher in early trade as firm Asian stocks boosted sentiment. Asian shares recovered from multi-month lows on Friday, as a rebound in U.S. equities on the back of upbeat economic data calmed nerves after a bruising selloff in global markets, but investors remained cautious ahead of next week's Federal Reserve policy meeting. At the time of writing, the S&P BSE Sensex was up 184.67 points or 0.98% to 19,011.83 while the CNX Nifty was up 57.50 points or 1.01% to 5,756.60
On macro front, the Central Statistics Office (CSO) will unveil wholesale price index (WPI) data for May 2013 today, 14 June 2013. Inflation based on the wholesale price index (WPI) is seen easing further to 4.8% in May 2013, according to a poll of economist carried out by Capital Market. The WPI eased sharply to 4.89% in April 2013, from 5.96% in March 2013. Meanwhile, WPI inflation for February 2013 was revised upwards to 7.28% from 6.84% reported earlier.
Source by Commodity Insights

Economic Buzz: Singapore Q1 Jobless Rate Marginally Up

Singapore unemployment rate rose slightly to 1.9 percent in the March quarter from 1.8 percent in the December quarter, the Ministry of Manpower said Friday, confirming its preliminary estimate released in April 30. Growth in employment slowed, reflecting continued weakness in the economy and the recent government measures that tightened job conditions for foreign workers.
Total employment rose by 28,900 in the first quarter of 2013, more than 20,800 estimated initially. Still, the gain was substantially weaker than the previous quarter's increase of 44,000.
Redundancy declined, after rising in the preceding two quarters. As many as 2,120 workers were made redundant in the first quarter of 2013. This was lower than the 3,350 workers affected in the preceding quarter.
Source by Commodity Insights

Base Metals Declined On LME On Weaker Global Equity Markets

Base metals fell sharply on London Metal Exchange in the European trading hours Thursday as weaker global equity markets and concerns about global economic growth overrode a brief pickup in Asian buying following a three-day Chinese public holiday.
The reopening of Chinese markets after the three-day Dragon Boat Festival was the first chance to assess domestic sentiment following poor Chinese trade figures released over the weekend. Asian traders initially took the opportunity to pick up metals, but this was short-lived and selling set in on the move into European trading hours.
LME three-month copper was 0.7% lower on the day at $7068.50 a metric ton. Aluminum fell less, down 0.3% at $1,859 a ton. Aluminum was the last in the group to relinquish its gains, finding support from a force majeure declaration from Norsk Hydro at its Alunorte alumina refinery in Brazil due to power shortages.
Indian Copper June expiry was trading at Rs 410 per kg, down 0.33 percent. The prices tested a high of Rs 417 per kg and a low of Rs 409.35 per kg. Indian Rupee tested levels of 57.98, down 0.36 percent. This was bringing some support for Rupee.
The declaration saves miners from having to pay fines if they are unable to fulfill shipment commitments. Analysts at Triland said as alumina can't be stored easily this disruption should feed through the aluminum supply chain relatively quickly, if no alternative sources can be found.
Jitters regarding the health of the global economy and thus the outlook for industrial metals demand lingered in the market, weighing down prices.
Source by Commodity Insights

Economic Buzz: Australia Jobs Data Surprise To Upside

Australia's May employment data surprised markets with a gain in jobs, sending the nation's currency jumping. Total employment rose by 1,100 last month, with the jobless rate holding steady at 5.5%, the Australian Bureau of Statistics said Thursday. On the other hand, the gains came on the back of a 6,400 rise in part-time jobs, with full-time positions falling 5,300. Source by Commodity Insights

Copper Rises As Chinese Buyers Return To Work

Copper.......

Copper three month prices have gained on the return of Chinese buyers that will help in underpinning the volumes. The decline of Dollar against the Euro is another promising aid for the metal.
The Dollar was last seen trading at 1.3351, down by 19 pips. In last four sessions Dollar has given 1 percent of its value. The rise in Euro has been on account of gain in industrial production and nervous traders of Dollar on the stance of Federal Reserve.
Eurostat reported last night that industrial production rose by a 0.4% in April from March, defying expectations for a 0.2% decline. Year-on-year industrial production declined by 0.6%, better than market expectations of 1.2% contraction.
LME Copper three month prices was last checked at $ 7162 per tonne, against $ 7120 per tonne on Wednesday. MCX Copper June expiry settled at Rs 411.5 per kg, up 0.17 percent. The prices look capped at Rs 415 per kg at this juncture. Support for the contract is at Rs 407 per kg.
Shanghai Copper was trading in losses on the back of adjustment in prices after three days of closure. September benchmark contract of copper was trading at 1180 yuan per tonne, up 51880 yuan per tonne.
Source by Commodity Insights

Economic Buzz: India's April Industrial Production Up 2%

The Ministry of Statistics & Programme Implementation announced the release of the monthly quick estimates of Index of Industrial Production (IIP) for the month of April 2013 compiled by the Central Statistics Office. The index is a composite indicator that measures the short term changes in the volume of industrial production. According to the index, the industrial growth for the month of April 2013 over the corresponding month of the previous year is 2.0%. The three sectors that constitute the index are Mining, Manufacturing and Electricity. The monthly growth rates of these three sectors for the month are (-) 3.0%, 2.8% and 0.7% respectively. As per “use-based” classification there has been positive growth in basic goods [1.3%], capital goods (1.0%), intermediate goods [2.4%] and consumer non-durables (12.3%) whereas negative growth has been registered in consumer durables [(-) 8.3%].
Source by Commodity Insights

Economic Buzz: Japan Domestic CGPI Rises 0.1% In May

An index measuring prices for domestic corporate goods in Japan was up 0.1 percent in May compared to the previous month, the Bank of Japan said on Wednesday, standing at 101.6, following the upwardly revised 0.4 percent gain in April. On a yearly basis, prices were up 0.6 percent, following the upwardly revised 0.1 percent increase in the previous month. Export prices were down 0.4 percent on month and 2.3 percent on year, while import prices shed 1.3 percent on month and 4.5 percent on year.
Source by Commodity Insights

Nickel Marches Higher On MCX

Even as the steel demand is in doldrums and there are calls that the lackluster trend will continue in world markets on growth of supplies, Nickel prices in Indian markets charged for the fourth consecutive day on the back of depreciating Rupee against the Dollar. The Rupee is trading at all time low of 58.83 per Dollar, down 1.17 percent.
MCX Nickel was trading at Rs 873.9 per kg, up 0.8 percent. The markets tested a high of Rs 878 per kg and a low of Rs 870.7 per kg. The prices can test Rs 890 per kg, if the continuous decline in Rupee doesn't stop.
LME three month Nickel prices declined by $ 92 per tonne and were trading at $ 14853 per tonne. This is three day low for the metal. Nickel inventories has been growing at a rapid pace in LME warehouses and have now reached 182436 tonnes, up 30 percent this year.
Source by Commodity Insights

Economic Buzz: Bank Of Japan Holds Steady, Ups Outlook

The Bank of Japan held its asset-buying and other policy elements unchanged Tuesday, while using slightly more upbeat language on the economy. While the lack of fresh easing moves was widely expected, the policy announcement sent the yen rising and pushed stock futures lower as the equity market was on lunch break when the announcement came. The central bank said Japan's economy has been picking up and exports have started picking up, after saying at its last meeting on May 22 that the economy has started picking up and exports have stopped decreasing. It also said some indicators suggest a rise in inflation expectations.
Source by Commodity Insights

Economic Buzz: Bank Of Japan Keeps Monetary Policy Unchanged

The Bank of Japan on Tuesday decided to keep the target for the expansion of the monetary base unchanged at JPY 60-70 trillion annually. The central bank said that it will continue to purchase Japanese government bonds so that their amount outstanding will increase by about JPY 50 trillion annually. Japan's economy has been picking up, the bank said. Exports have started to pick up with overseas economies gradually heading towards overall improvement, it added. Source by Commodity Insights

Oil Steady Above $96 In Asia

Oil......

Oil futures traded steady above $96 a barrel in the Asian session tracking the gains in Japanese and other equity markets.
Light, sweet crude futures for July delivery rose 0.14% to $96.17 per barrel on the New York Mercantile Exchange, in Asian trading Monday after settling up 1.54% at $96.22 a barrel on Friday in the U.S.
A strong May jobs report lifted crude at the end of last week. In U.S. economic news delivered last Friday, the U.S. Labor Department said the U.S. economy added 175,000 jobs in May, but added the unemployment rate rose to 7.6% from 7.5%. The April reading was revised lower to 149,000 from 165,000 while the March reading was revised down to 138,000 from 142,000.
However, traders appear a bit more reserved about oil futures Monday after China, the world’s second-largest economy behind the U.S., delivered a raft of disappointing data. After a crackdown by Chinese officials on manipulators that use currency conversions to boost export data, Chinese exports showed an increase of just 1% last month. Exports to the U.S. and European Union, China’s two largest export markets, declined for a third consecutive month.
Imports fell 0.3%, well below the expected 6% increase. China's consumer inflation dropped to 2.1%, below the expected reading of 2.5%, while producer prices fell 2.9%. Analysts expected PPI to drop 2.5%. Retail sales rose 12.9%, which met expectations.
Fixed-asset investment and industrial production also met analysts’ expectations with year-over-year gains of 20.4% and 9.2%. China’s M2 money supply rose 15.8%, but that was below the expected 15.9% increase. New loans totaled 667.4 million yuan, but that missed expectations of 850 billion yuan and down from April's 792.9 billion yuan.
MCX June crude oil futures may open today’s session near Rs 5525 levels with resistance near Rs 5555 levels and support around Rs 5505 levels.
Source by Commodity Insights

Gold Ups Modestly After Recent Losses

Gold........

Gold inched up in early Asian session today covering up few dollars after the metal tumbled more than $30 an ounce in U.S. trading on Friday.
Gold futures for August delivery inched up 0.06% to $1,383.85 per troy ounce on the Comex division of the New York Mercantile Exchange in Asian trading Monday. It settled down 2.68% at $1,377.85 a troy ounce in U.S. trading on Friday. The metal may find support near $ 1340 levels and resistance near $ 1420 levels.
Speculators raised their net-long position by 19 percent to 57,113 futures and options by June 4, U.S. Commodity Futures Trading Commission data show. The holdings surged 60 percent in two weeks, the most since March, as short bets contracted.
In U.S. economic news delivered last Friday, the U.S. Labor Department said the U.S. economy added 175,000 jobs in May, but added the unemployment rate rose to 7.6% from 7.5%. The April reading was revised lower to 149,000 from 165,000 while the March reading was revised down to 138,000 from 142,000.
Over the weekend, China, the world’s second-largest economy behind the U.S., delivered a raft of disappointing data. After a crackdown by Chinese officials on manipulators that use currency conversions to boost export data, Chinese exports showed an increase of just 1% last month. Exports to the U.S. and European Union, China’s two largest export markets, declined for a third consecutive month.
Imports fell 0.3%, well below the expected 6% increase. China's consumer inflation dropped to 2.1%, below the expected reading of 2.5%, while producer prices fell 2.9%. Analysts expected PPI to drop 2.5%. Retail sales rose 12.9%, which met expectations.
Fixed-asset investment and industrial production also met analysts’ expectations with year-over-year gains of 20.4% and 9.2%. China’s M2 money supply rose 15.8%, but that was below the expected 15.9% increase. New loans totaled 667.4 million yuan, but that missed expectations of 850 billion yuan and down from April's 792.9 billion yuan.
MCX August gold futures may open the week near Rs 27600 levels with resistance near Rs 27700-750 levels and support around Rs 27500 levels. In the near term the commodity may face a resistance near Rs 27900 levels and support near Rs 27100 levels.
Source by Commodity Insights

Copper In Tight Range Ahead Of US Payrolls

Copper.......

Copper prices moved in a tight range ahead of US nonfarm payrolls numbers. The prices declined by $ 114 per tonne last night on LME on the hearsay that US can reduce its stimulus measures. The prices were trading at $ 7360 per tonne very close to last night settlement at $ 7346 per tonne. Metals are expected to remain rangebound.
First-time claims for unemployment benefits in US registered a minor decline. The report said initial jobless claims dropped to 346000, a decrease of 11000 from the previous week's revised figure of 357000. In other news, Governing Council led by ECB President Mario Draghi maintained the main refinancing rate at a record low 0.50 percent, in line with economist's expectations.
The move came after a quarter-basis point reduction in May, the first rate cut in nine months. The bank also held the marginal lending facility rate at 1.50 percent, following a 50 basis points cut last month. The zero deposit rates was also left unchanged.
New orders in the German manufacturing sector fell more-than-expected in April as the ongoing economic crisis continued to weaken demand in the Eurozone, raising fears that the domestic economy might not sustain first quarter's modest recovery.
Factory orders declined 2.3 percent sequentially in April, reversing the previous month's 2.3 percent increase, the Ministry of Economics and Technology said Thursday. The decline was faster than the 1 percent drop economists had forecast.
MCX Copper corrected by 1.75 percent to end at Rs 416.9 per kg. The prices tested a high of Rs 423.75 and a low of Rs 416.55 per kg. Further downfall is possible that can take prices close to Rs 414 and 413 per kg. Resistance for the contract is at Rs 425 per kg.
Source by Commodity Insights

Gold Drops On Caution Over Payrolls

Gold........

Gold futures slipped in the electronic session today along with the Asian equities hit by the caution ahead of the nonfarm payrolls data.
Gold for August delivery are trading down $4 at $ 1412 per ounce on the Comex division of the New York Mercantile Exchange. Yesterday, it rose $17.30, or 1.2%, to settle at $1,415.80 an ounce It traded as low as $1,391.20 earlier.
The metal climbed yesterday to highest level since mid-May as the dollar dropped against the euro and Japanese yen ahead of the latest monthly figures on U.S. employment.
On Wednesday, gold saw sharp midday gains, with the August contract rising by as much as $13, as stocks sold off following weak U.S. private-employment data from ADP. But it soon pared those gains to settle just 0.1% higher. Data in the U.S. Thursday showed jobless claims fell 11,000 to a seasonally adjusted 346,000 in the week ended June 1. Economists had expected claims to decline to 345,000.
The euro gained following the European Central Bank’s decision to stand pat on its lending rate and cut its 2013 growth forecast, while the yen rallied following Japanese Prime Minister Shinzo Abe’s Wednesday unveiling of plans to spur economic growth.
But gold investors’ top concern was Friday’s release of May data on the U.S. job market, which is likely to provide hints on whether the Federal Reserve will soon decide to taper its bond-buying program.
Draghi spoke at a news conference following a meeting in which the ECB kept key rates unchanged. Separately, the Bank of England also decided to keep interest rates the same. Draghi said the ECB sees a gross domestic contraction of 0.6% in 2013 versus a March forecast of a 0.5% drop. The ECB lifted its 2014 growth forecast slightly, to 1.1% from 1%.
MCX August gold futures may open today’s session near Rs 27840 levels with support around Rs 27750-700 levels.
Source by Commodity Insights

Gold Recovers From Early Losses On Weak Greenback

Gold.......

Gold futures recovered from the early losses on weak greenback in Thursday's evening sessions and traded in range bound manner, as investors looked ahead to the European Central Bank meeting later in the session. Market players were also awaiting data on U.S. jobless claims later Thursday to assess the strength of the U.S. economy and the need for further stimulus from the Federal Reserve. The ECB was not widely expected to make any changes to monetary policy at its monthly meeting later Thursday but the bank's post-policy meeting press conference with President Mario Draghi would be closely watched. The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion. The minutes of the meeting will be published at 9.30am on Wednesday 19 June. U.S. stock futures pointed to a higher open on Thursday, as markets eyed the release of U.S. data later in the day amid growing uncertainty over the future of the Federal Reserve's stimulus program. The government of India on Wednesday raised the import duty on gold to 8% from 6% in a bid to rein in import of the yellow metal and help curb a yawning current account deficit. According to the World Gold Council, India could import as much as 400 tonnes of gold in the first three months of the current financial, a 200% annual increase, raising the chances that the current account deficit could worsen in the new financial year. India imported 162 tonnes of gold in May alone. The Fed's Beige book showed last night that the overall economic activity increased at a modest to moderate pace since the previous report across all Federal Reserve Districts except the Dallas District, which reported strong economic growth.

The COMEX August Gold was trading higher at $1,403.85 on ounce, up $5.35 or 0.38% from last close. Meanwhile, Silver July contract was trading up at $22.572 on ounce, up 0.100 or 0.44% from last close. Euro was trading up at $1.3116, up 0.0025 or 0.19% from last close.

Indian gold futures recovered from the early losses tracking the recovery in the international gold prices amid weak Indian rupee. The MCX Gold for the August delivery quotes at Rs 27,695, up Rs 14, after trading in the range of Rs 27,749-27,490 levels. Technically, the counter may face resistance at Rs 27,850-27,900 and supports at Rs 27,490-27,390 level. July Silver quotes at Rs 44,325, up Rs 107 or 0.24% from last close.
Source by Commodity Insights

Commodities Buzz: China Barley Imports Nearly Halve In First Four Months Of 2013

A slump in Chinese malting barley imports, besides improved crop conditions in major producing countries, could lead to a fall in prices. Chinese imports of barley, which are essentially all for use by maltsters rather than as livestock feed, dropped by nearly 50% to 566,000 tonnes in the first four months of 2013. China is the top importer and purchases nearly half of its consumption of some 4 million (m) tonnes a year. The global Barley production is forecast to climb to 137.7 million tons from 129.7 million tons in 2013-14 following bigger crops in Russia, Ukraine, Turkey and Morocco, according to the International Grains Council.
Source by Commodity Insights

Economic Buzz: Australia Trade Surplus Shrinks On Forex Strength

Australia reported Thursday a narrowing of its trade surplus in April, as exports logged a 1% drop from the previous month. The April trade account was just 28 million Australian dollars ($26.6 million) in surplus, shrinking drastically from a A$555 million suplus in March, the Australian Bureau of Statistics said. The drop in exports came as the Australian dollar hit its recent peak near $1.06, and despite a 12% rise in non-monetary gold exports during the month. Since then, the Australian currency has slipped back to its lowest levels in more than a year. April imports, meanwhile, ticked 1% higher from March.
Source by Commodity Insights

Gold Dips Below $1400; ECB Due

Gold........

Gold futures dipped below $1400 an ounce in the Asia electronic trades today with investors in caution ahead of European Central Bank’s meeting. Losses in the equity markets may support the metal at lower levels.
Asian markets fell Thursday after a big drop on Wall Street in the wake of a weak U.S. private-sector jobs report, raising concerns about Friday’s crucial nonfarm payrolls data. Japanese equities were tormented by more volatility that also affected the yen and bond yields, dragging stocks closer toward a so-called bear market.
Gold for August delivery is trading down $1 at $ 1398 per ounce on the Comex division of the New York Mercantile Exchange. Yesterday, it climbed $1.30, or 0.1%, to settle at $1,398.50 an ounce. Earlier, it had climbed by as much as $13 to tap a high around $1,410.
Investors showed caution ahead of the European Central Bank’s meeting on Thursday, as well as official U.S. government employment figures due Friday that were likely to offer a hint as to what the Federal Reserve will decide to do with its bond-buying program.
Automatic Data Processing Inc. reported that the economy gained 135,000 jobs in May, below expectations for a gain of 170,000. Other data showed U.S. productivity reduced to 0.5% in the January to March period from a prior read of 0.7%, while the U.S. services industry accelerated a bit in May.
U.S. equities extended their losses into a second day on the back of those economic reports, luring some investors to the metals market. Weak jobs growth could further strengthen the case for the Fed to maintain its $85 billion-a-month bond-buying program.
MCX August gold futures may open today’s session near Rs 27600 levels with support near Rs 27540 levels.
Source by Commodity Insights

Copper Trades With Losses Ahead of Non Farm Payroll Number of US

Copper.....

Although a whole day is left for the announcement of Nonfarm payroll numbers in US, Copper markets are trading in a slower zone before the data. Any rise in US economic figure will pave way for the movement of copper in coming days. The LME three month benchmark prices were trading at $ 7419 per tonne. The spot markets were trading at $ 7390 per tonne.
Another reason to worry is the dilemma of Federal Reserve stance had the economic numbers come more than expected. In that case Fed Chairman Ben Bernanke can review the position of continuation of stimulus measures.
In last two days, prices have been supported by disruption of Copper supplies in Freeport McMoran Copper and Gold mine. The production has been halted for three months.
In a major economic news last night, private payroll data from ADP showed that non government US employers added 167000 jobs. Meanwhile, ISM May services index rose to 53.7 percent compared to 53.1 percent in April. Economists were expecting a reading of 54 percent.
On Wednesday, data revealed the euro zone's service-sector purchasing managers' index fell to 47.2 in May, missing expectations for a 47.5 reading.
MCX Copper benchmark prices ended at Rs 424.2 per kg on Wednesday, up Rs 3.7. The prices are expected to correct from current levels with downside targets at Rs 420 and 418 per kg. Resistance for the contract is at Rs 425-426 per kg.
Source by Commodity Insights

Economic Buzz: U.S. April Trade Deficit Rises

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced on Tuesday that total April exports of $187.4 billion and imports of $227.7 billion resulted in a goods and services deficit of $40.3 billion, up from $37.1 billion in March, revised. April exports were $2.2 billion more than March exports of $185.2 billion. April imports were $5.4 billion more than March imports of $222.3 billion.
Source by Commodity Insights

Commodities Buzz: Brazil Announces Harvest Plan, Aim 18% Increase In Farm Credit For Coming Year

Brazil announced a 136 billion Brazilian reals boost its agriculture through measures on grain storage and a minimum price for cotton, although it may be sugar producers, which benefit most. Brazil's government Tuesday unveiled an 18% increase in farm credit available for the 2013-2014 harvest with the aim of raising the country's agricultural production to new record levels.

The government said it plans to offer 136 billion Brazilian reals (BRLs) in credit over the coming year for financing farm operations, sales and new investment. With this plan, we're offering the largest amount of resources and the best financing conditions ever for the country's farm sector, Agriculture Minister Antonio Andrade said at an announcement alongside Brazilian President Dilma Rousseff.

Agriculture Ministry officials said the plan would extend BRL97.6 billion for operations and commercialization at average interest rates of 5.5% annually. Additionally, the plan will extend BRL38.4 billion in financing for farm investment at average interest rates of between 3.5% and 5%.

With the financing announced Tuesday, Mr. Andrade said, the government hopes to raise grains production to 190 million tonnes in the upcoming harvest from 184 million tonnes expected this year. Andrade also announced that the government planned to offer BRL25 billion in financing over a 5-year period for increasing private warehousing infrastructure in the country.
Source by Commodity Insights

Commodities Buzz: Taiwanese Major Yusco Cuts Prices of Steel Products

Yieh United Steel Corp. (Yusco), one of the major stainless steel producers in Taiwan announced to cut its list prices for stainless steel products for June. The company decided to cut domestic prices by NT$500-NT$2,000/ton and reduce export prices by US$20- US $50/ton.
Yusco cut domestic prices for 300 and 400 grades by NT$2,000/ton and NT$500/ton respectively. Yusco pointed out that low-priced imports from China and Korea are dumped into the market, causing the market prices continuously fall. Therefore, Yusco decided to cut prices in order to help buyers remain competiveness.
Source by Commodity Insights

Economic Buzz: Australia's Current Account Deficit Decreases In March

Latest Australian Bureau of Statistics (ABS) figures showed that in seasonally adjusted, current price terms, the current account deficit decreased $6,249m (42 per cent) to $8,510m in the March quarter 2013. Exports of goods and services rose $2,450m (3 per cent) and imports of goods and services fell $3,130m (4 per cent). The primary income deficit fell $681m (7 per cent).
Source by Commodity Insights

Gold Slips Further As Equities Rally

Gold.......

Gold futures slip further depressed by rally in the Asian and European equity markets and strength in the US dollar. The metal may dip below $1400 if the markets continue to rally along with the US dollar.
Gold for August delivery gave up $6.6 to $1,405 an ounce in electronic trade on the Comex division of the New York Mercantile Exchange. It rose $18.90, or 1.4%, to settle at $1,411.90 an ounce on Monday.
The prices reclaimed the $1,400-an-ounce level, helped by a decline in the U.S. dollar on data showing a contraction in U.S. manufacturing in May. Dollar-denominated commodities tend to benefit from a weaker greenback as it makes them less expensive for holders of other currencies.
Monday’s weak manufacturing report from the Institute of Supply Management curbed concerns that the U.S. Federal Reserve is preparing sooner than later to taper its bond-buying program, which has been supportive for gold.
The markets will further assess the Fed’s quantitative easing program — aimed at stimulating economic growth — when the widely watched U.S. employment report for May is released on Friday.
The U.S. dollar rose against most major rivals, the ICE dollar index is trading at 82.759, higher than Monday’s level of around 82.687.
MCX August gold futures are trading down more than Rs 50 at Rs 27276 per 10 grams. The traders may short it with the target of Rs 27230 and Rs 27170 levels with stop loss around Rs 27320 levels.
Source by Commodity Insights

Crude Jumps, WTI Futures Up From One-Month Low

Crude........

MCX Crude oil futures edged up today, witnessing a strong bounce in afternoon as supportive economic data from Eurozone lifted the battered commodity. The mood in Asian equities was grim after a meek Chinese manufacturing data but the WTI futures were boosted in the afternoon. The commodity edged up from lows near $91 per barrel and currently quotes at $92.87, up 90 cents per barrel. Prices had tested their one month low of $91.26 per barrel on the day.

The economic situation in the euro area “remains challenging” and the European Central Bank doesn't expect much of an improvement before the end of this year, ECB President Mario Draghi said today, according to media reports. Draghi noted that he sees a few signs of a possible stabilization but persisted that ECB's baseline scenario continues to be one of a very gradual recovery starting in the latter part of this year. Draghi vehemently defended the central bank's controversial policy measures - the purchase of government bonds to support those countries that submit to euro-zone adjustment programs.

Markets are under a spell of global monetary easing that leaves valuations vulnerable to changes in sentiment, the Bank for International Settlements (BIS) warned Sunday, according to media reports. The BIS, effectively a central bank for central banks, has long sounded the alarm over dovish policies pursued by the Federal Reserve, the Bank of England, the Bank of Japan and other central banks.

Earlier in the day, HSBC Chinese manufacturing PMI indicated a continued contraction and led oil lower. The final version of the HSBC China manufacturing Purchasing Managers' Index for May fell to 49.2, down from a preliminary reading of 49.6, and more than a point off from April's 50.4. Oil was also hurt by a massive 3.70% correction in Japanese stocks.

However, the commodity took a turn around after the euro zone's manufacturing PMI rose unexpectedly last month. In a report, research group Markit said the euro zone's manufacturing PMI rose to 48.3, from 47.8 in the preceding month. Equities bounced and industrial commodities like Copper and oil remained well bid. MCX Crude oil futures edged up, breaking above Rs 5200 per barrel and moved up nearly Rs 100 to test a high of Rs 5301 per barrel. The open interest in the counter rose by nearly 11%, indicating good fresh buying.

Source by Commodity Insights

MCX Gold Jumps By Rs 100

Gold.......

Domestic gold prices jumped by more than Rs 100 per 10 grams in the early European session today, with the international gold prices jumped $3 per ounce.
MCX August gold futures are trading at Rs 27079 per 10 grams, up more than Rs 100. The counter may face a resistance near Rs 27150 – 27200 levels.
Gold for August delivery rose $3.50, or 0.3%, to $1,396.60 an ounce on the Comex division of the New York Mercantile Exchange. On Friday, it tumbled 1.75% on Friday to settle the week at $1,387.35 a troy ounce.
The metal on Friday dropped $19, or 1.4%, hurt in part after better-than-expected data about manufacturing activity in the Chicago area, and after a gauge on U.S. consumer sentiment in May reached the highest level since 2007. The U.S. dollar turned higher after the reports. A stronger dollar tends to press down on prices of dollar-denominated commodities by making them more expensive for holders of other currencies.
Gold futures fell 5.4% in May, in part as gains in equities drew investors away from safe-haven assets such gold. May’s decline marked the seventh monthly drop for gold prices in the last eight months.
The market on Monday will look for manufacturing figures from the U.S., as well as the euro area, Germany, France and Italy.
In other action Monday, July copper rose 3 cents, or 0.8%, to $3.32 a pound. The industrial metal was in focus with the release of a final reading of a May version of China’s Purchasing Managers’ Index by HSBC on Monday. HSBC’s index fell to 49.2, down from a preliminary reading of 49.6.
Source by Commodity Insights

Economic Buzz: Australia's April Retail Sales Rise 0.20%

Australian Bureau of Statistics said that Australian retail sales rose to a seasonally adjusted 0.2% in April, from -0.4% in the preceding month. Analysts had expected Australian retail sales to rise 0.3% last month.
Source by Commodity Insights