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MCX Daily Report
03RD JUNE 2019
News Highlights BULLION - Bullion counter may trade with upside bias as gold prices rose on Monday to their highest in more than two months, with investors seeking refuge in safe-haven assets as heightened Sino-U.S. trade tensions and Washington's threat of tariffs on Mexico stoked worries of a global recession. Tensions between the United States and China escalated during the weekend as the two countries clashed over trade, technology and security. A senior Chinese official and trade negotiator said on Sunday the United States cannot use pressure to force a trade deal on China, refusing to be drawn on whether the leaders of the two countries would meet at the G20 summit to work out an agreement later this month. Hedge funds and money managers increased their net long positions in COMEX gold in the week to May 28, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The U.S. Mint sold 4,000 ounces of American Eagle gold coins in May, down 60 percent from the previous month, according to the latest data. Gold premiums in top consumer China rose last week as investors bought the metal as a safe-haven, while bullion demand moderated in India as local prices jumped to two-week highs. ENERGY- Crude oil may remain in red as oil prices fell more than 1% on Monday to extend losses of over 3% from Friday, when crude markets racked up their biggest monthly losses in six months amid stalling demand as trade wars fanned fears of a slowdown in the global economy. The drops followed price slumps of more than 3% on Friday, which made May the worst-performing month for crude futures since last November. The U.S.-China feud remains most critical to the global growth outlook, but the addition of trade tensions between the U.S. and Mexico raised the slower demand picture for the Americas. U.S. energy firms this week increased the number of oil rigs operating for the first time in four weeks, and weekly production EIA last stood at a record 12.3 million barrels per day (bpd). That’s pushed up commercial U.S. crude oil inventories EIA, which have increased by 8.4% since the start of the year to 476.5 million barrels. BASE METAL - Base metals may trade with sideways to weak bias. Spot prices for refining copper concentrate have fallen to their lowest in 6-1/2 years and look set to stay under pressure, dragged down as China cements itself as a dominant producer of processed metal. Chinese copper smelters are expected to add almost 1 million tonnes of capacity in 2019, stealing a march on rivals in Japan, South Korea and Chile, and pushing down the spot treatment charges (TCs) the industry receives for processing concentrate. TCs slipped as far as $60 a tonne on Thursday, the lowest since November 2012 and down around 30% from a two-year peak of $96 hit in December. Copper prices on the Shanghai Futures Exchange (ShFE) fell to their lowest in two years on Monday, as weak Chinese factory data and a U.S. threat to impose tariffs on Mexican goods sparked fears of weaker global growth and demand for metals. Prices of iron ore and other steelmaking raw materials fell in China on Monday amid signs of weaker short-term demand for steel, but hopes of government measures to prop up the economy provided some support.
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