Informist, Wednesday, Aug 9, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of all the base metals traded firm on the Multi Commodity Exchange of India and London Metal Exchange on improved risk appetite as investors assess economic data from China, fall in inventory, and a weaker dollar.
The positive sentiment for non-ferrous metals was aided by value buying after a sharp fall in the past few trading sessions. US Federal Reserve Bank of Philadelphia President Patrick Harker on Tuesday said that the US central bank may consider cutting rates in 2024, which also supported the base metals prices.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 102.39 ahead of the US inflation data on Thursday. A weaker greenback makes dollar-denominated commodities such as non-ferrous metals cheaper for holders of other currencies.
“Base metals are mostly trading higher buoyed by a weaker dollar and consistent weak data releases raising hopes for more stimulus measures from the Chinese government,” Kotak Securities said in a note. “China continued to flash signs of weak consumer and business demand as both CPI and PPI contracted in July for the first time since November 2020,” the broking firm said.
ALUMINIUM prices rose due to fall in stocks by 3,900 tn at LME-accredited warehouses. Traders increasing their long positions on the domestic exchange, also aided the prices.
COPPER prices gained because of dollar weakness and short-covering of positions by traders on the MCX. The latest LME Commitments of Traders Report showed traders increased their bullish positions by 2,248 lots to 53,996 lots as of Aug 4.
LEAD contracts rose because of a fall in stocks by 50 tn at LME-approved warehouses.
ZINC contracts traded higher as LME inventory fell by 1,175 tn. Speculators increasing their net long positions by 4,524 lots to 37,548 on the LME also supported the positive cue.
* At 1926 IST, on the MCX, the August futures contract of:
–Aluminium was at 200.70 rupees a kg, up 0.2%
–Copper was at 733.40 rupees a kg, up 0.6%
–Lead was at 183.50 rupees a kg, up 0.1%
–Zinc was at 223.10 rupees a kg, up 0.8%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 199.50-204.0 rupees
–Copper seen at 728.0-740.0 rupees
–Lead seen at 181.0-184.50 rupees
–Zinc seen at 218.50–225.0 rupees
End
US$1 = 82.82 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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