Copper Under Severe Stress
COMEX Copper futures tanked near three and half year low yet again as DOW fell 10% and European equities also saw similar losses. China’s automobile sales plummeted in February, as the coronavirus epidemic spread and curbed consumption demand, according to media reports. Total auto sales were down 79% from a year earlier at 310,000 vehicles, the government-backed China Association of Automobile Manufacturers said Thursday. COMEX Copper has extended losses and currently quotes at $2.41 per pound, down 1.41% on the day. MCX Copper also ended lower but the losses were limited on deep slide in Indian Rupee. MCX Copper fell 0.71% to close at Rs 422.50 per kg. Indian Rupee fell to a record low as local equities tanked. The INR slipped against the US dollar following a massive global selloff in risky assets amid continued worries over the economic impact from the coronavirus virus. The rupee today fell to as much as 74.50 per dollar afternoon as the local equities saw an extended bout of selling to test near two year low.
MCX Crude Slides 6%
Crude oil tanked yesterday as global equities fell sharply. Oil market remained worried on the demand factor. WTI Crude oil is currently down 1.24% at $31.13 per barrel. MCX Crude oil tanked 6% at Rs 2335 per barrel yesterday. According to the US Department of Energy’s Short Term Energy Outlook (STEO) for March, as a result of the outcome of the March 6 OPEC meeting, EIA’s forecast assumes that OPEC will target market share instead of a balanced global oil market. EIA forecasts OPEC crude oil production will average 29.2 million barrels per day (b/d) from April through December 2020, up from an average of 28.7 million b/d in the first quarter of 2020. EIA forecasts OPEC crude oil production will rise to an average of 29.4 million b/d in 2021. EIA expects global petroleum and liquid fuels consumption will average 99.1 million b/d in the first quarter of 2020, a decline of 0.9 million b/d from the same period in 2019. EIA expects global petroleum and liquid fuels demand will rise by less than 0.4 million b/d in 2020 and by 1.7 million b/d in 2021. Lower global oil demand growth for 2020 in the March STEO reflects a reduced assumption for global economic growth along with reduced expected travel globally because of the 2019 novel coronavirus disease (COVID-19).
Gold Sees Heavy Losses, Lingers Near One Month Low
COMEX Gold futures extended losses and took a heavy tumble yesterday. The metal tanked even as global equities fell sharply. Gold fell as crude oil melted and DOW fell nearly 10% even as the US Federal Reserve took steps to provide liquidity to the financial markets. The New York Fed said that it will offer banks more than $1 trillion worth of additional short-term cash loans as part of an effort to smooth operations in the Treasury and money markets. In addition to pumping substantial amounts of money into the banking system, the Fed said it will extend its monthly purchases of $60 billion worth of Treasury securities across a range of maturities beyond just short-term T-bills. European Central Bank left interest rates unchanged and provided fresh stimulus measures that included additional EUR 120 billion bond purchases. Gold extended losses from eight year high and dropped around 4% yesterday. The metal has lost another 1.84% today to trade at a one month low of $1561 per ounce. MCX Gold futures closed down 2.48% at Rs 42280 per 10 grams and should slide further today.
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