Informist, Wednesday, Nov 2, 2022
MUMBAI – Futures contracts of most base metals on the Multi Commodity Exchange of India and the London Metal Exchange traded in a thin range as the dollar slipped ahead of the US Federal Reserve’s interest rate decision later in the day. A decline in inventory at LME-approved warehouses also lent cues.
* The dollar index fell 0.2% to 111.20 due to expectations of slower rate hikes by the Federal Reserve in December. A weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies.
* LME stocks of ALUMINIUM fell by 2,925 tn to 581,050 tn, stocks of COPPER were down 4,200 tn at 102,225 tn, NICKEL by 438 tn to 51,588 tn, and ZINC by 600 tn to 44,225 tn. The only exception was LEAD, whose stock remained unchanged at 27,625 tn.
* “Commodities may waver ahead of FOMC policy decision as investors are more interested in policy outlook as CME Fed funds futures indicate traders remain split between 50 bps and 75 bps rate hike for December meeting,” Kotak Securities said in a report.
* A US private payrolls report will be closely watched as it helps set expectations for a crucial government report due on Friday, the brokerage firm added.
* ALUMINIUM contracts gained as traders increased their long positions on the domestic bourse, and due to a decline in LME inventory. However, prices were off the day’s highs as participants await the outcome of the Fed’s meeting.
* COPPER prices moved in a thin range with a positive bias, tracking subdued global cues rose and a recovery in the dollar.
* At 1832 IST, on the MCX, the November futures contract of:
–Aluminium was at 199.85 rupees a kg, up 0.2%
–Copper was at 658.10 rupees a kg, up 0.1%
–LEAD was at 179.05 rupees a kg, up 0.1%
–ZINC was at 256 rupees a kg, down 0.1%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 197.50-202.80 rupees a kg
–Copper seen at 655.0-662.0 rupees a kg
–Lead seen at 177.50-181.0 rupees a kg
–Zinc seen at 253.50–256.80 rupees a kg
US$1 = 82.78 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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