OUTLOOK FROM THE FUNDAMENTAL DESK: PRECIOUS METALS Gold prices trend remains weak on stronger US dollar index. Fed meeting today would give clues about early rate hike as the economy sees recovery. Many major events this week – BOE policy meet, Fed policy meet, Scottish Independence Vote and G20 Meetings. Federal Reserve officials came closer to agreement on an exit strategy from aggressive stimulus and the possibility of early rate rise might occur sooner than anticipated, according to minutes of their July meeting. Fed Yellen also plans to stop adding to its bond holdings in October, in a sign of its confidence that the economy is gaining strength. Physical demand has taken a hit with major buyers - China and India have remained on the sidelines for lower prices. Silver iShares rose 104 tonnes at 10554 tonnes while SPDR Gold stood to 788.4 tonnes. Maintain sell on rise in Gold. BASE METALS Base metals would remain negative during the day on stronger US dollar and from a weak housing market in China and excess supply. Prices got a boost after China’s central bank joined its European counterpart in boosting liquidity to address weakening growth. PBOC is injecting 500 billion yuan ($81 billion) into the nation’s largest banks, according to a government official familiar with the matter. Copper prices are likely to trade under selling pressure on expectation of huge supply coming in H2 2014, and next year. Nickel to remain supportive at lower levels on potential talks of Philippines nickel ore export ban. The union at Chiles Escondida, the worlds largest copper mine, has called a strike for Sept. 22 and 24, aiming to paralyze activity to win improved working conditions, the union said on Monday. Buy Copper and sell nickel, aluminium and zinc for the day. ENERGY Crude oil prices are expected to trade positive for intraday as OPEc general secretary says would cut oil production target by 500,000 barrels to 29.5 mln for the year 2015 Saudi Arabia cut its crude supply by 408,000 barrels a day in August, the biggest reduction since 2012, a submission made by the country to OPEC shows. Maintain buy in crude oil.
Posted on: Wed, 17 Sep 2014 14:17:43 +0000
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