Last week, MCX gold prices traded sideways for the entire week and sustained above the major psychological support level of Rs.29000. In the later part of the week, we observed some negative movement in it due to weaker than expected employment report for October. As per the data from U.S. Labor Department, the U.S. economy added 261000 jobs whereas the forecast was for 315,000 new jobs. The fall in the unemployment rate ticked down to 4.1%, its lowest level since December 2000.The U.S. Dollor Index, which measures the green back strength against a trade weight basket of six major currency rose by 0.04% and closed at the level of 94.86 on weekly basis. Gold’s gains were held in check as the U.S. dollar continued to trade near three month highs against a currency basket. Bullion is often used as a safe haven in times of geopolitical and economic uncertainty, while riskier assets such as equities are generally sold off.
MCX Silver also traded sideways taking cue from the Gold and closed at Rs.39048 with the marginal loss of 0.26 per cent on weekly basis. The recent U.S. economic data may delay the decision of interest rate hike by U.S. Federal Reserve as Unemployment rate use to serve as the important factor for interest rate hike decision. Ahead of the coming week, Unemployment Claims, Consumer Sentiment & Trade Balance will further provide direction to the bullion.
? BASE METAL
Last week, MCX Copper witnessed choppy movement for the entire week and managed to closed at Rs. 445.80, similar to its last week closing. As per the ECB comments in its last meeting, it was deemed to be more dovish about the economy. The central bank said that it is reducing its monthly bond-buying program amount by half, but is extending the time-frame of the bond buying. This led to sharp upside movement in the Dollar Index towards three month high and also supported base metals to sustain on higher levels.
Expectation of high demand coupled the tight supply further providing the strength the the Copper. Supply tightness was confirmed by latest figures from International Copper Study Group (ICSG) which said copper market should see a deficit of 151,000 tonnes this year and a deficit of 104,000 tonnes in 2018.
Last week, we saw sharp upside movement in the prices of Nickel and it made a high of Rs.841.90 during the week and closed at Rs.820.10 with the overall gain of 9.35 per cent on weekly basis due to strong demand. The expectation of boost in demand due to rise in electric car buying, acting as the catalyst for the bullish movement in it as manufacturers are trying to boost usage of nickel in electric vehicle batteries in as a substitute of expensive cobalt.Lead, Zinc & Aluminium traded sideways to positive for the most part of the week.
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