Precious Metals Preview:
Gold Supported, MCX Futures See Good Gains.
COMEX Gold futures stayed well supported yesterday. The metal hit one and half week high of $1935 per ounce. DOW saw continued selling pressure in intraday moves as traders focussed on the development around fresh fiscal stimulus. Dollar index stayed slippery and fell near one month low, keeping Gold afloat. MCX Gold ended at Rs 51300 per 10 grams, up 0.77% on the day. Covid-19 continues to remain a key worry for world economy. The Covid-19 pandemic is exacting a heavy toll on Europe. More than 240,000 people have lost their lives. Millions have suffered the illness themselves, the loss of loved ones, or major disruption in their work, their businesses, and their daily lives, IMF noted in a latest blog post. The economic impact of the pandemic has been enormous. The IMF’s latest Regional Economic Outlook for Europe forecasts a 7% decline in Europe’s GDP in 2020. The recovery from this crisis will be uneven and partial
Base Metals Preview:
Copper Extends Gains.
COMEX Copper hit 28 month high of $3.21 per pound yesterday before pulling back on slippery undertone in US equities. World Bureau Of Metal Statistics (WBMS) reported that the copper market recorded a deficit of 447 kt in January to August 2020 which follows a deficit of 383 kt in the whole of 2019. Reported stocks at the end of August 2020 were 37 kt higher than at the end of December 2019. This increase includes net deliveries of 57 kt out of LME warehouses and Comex stocks rose by 41.9 kt.
World mine production in January to August 2020 was 13.54 million tonnes which was 0.5 per cent lower than in the same period in 2019. Global refined production for January to August 2020 was 15.8 million tonnes up 3.6 per cent compared with the previous year with significant increases recorded in China (up 623 kt) and in Chile (up 101 kt).
Global demand for January to August 2020 was 16.2 million tonnes compared with 15.5 million tonnes for the same months of 2019. Chinese apparent demand for the period January to August 2020 was 9.4 kt which was 17.5 per cent higher than the first eight months of 2019. EU28 production rose by 0.2 per cent and demand was 172 kt lower than the comparable 2019 total.
EIA Crude Inventories Drop Again.
The US Energy Information Administration (EIA) reported a crude oil inventory decline of 1 million barrels for the week to October 16. This followed a draw of 3.8 million barrels reported for the previous week. In gasoline, the EIA reported an inventory increase of 1.9 million barrels for the week to October 16. Gasoline production last week averaged 8.9 million bpd, compared with 9.2 million bpd a week earlier.
In distillate fuels, the EIA reported an inventory fall of 3.8 million barrels for last week after a draw of 7.2 million barrels reported for the previous week. Distillate fuel production averaged 4.1 million bpd last week, compared with 4.3 million bpd a week earlier. US Refinery runs averaged 13 million barrels daily, compared with 13.6 million bpd a week earlier, operating at 72.9 percent of capacity, versus 75.1 percent of capacity during the previous week.
Crude oil stored at the Cushing, Oklahoma delivery point for contracted barrels of WTI increased by 975,000 barrels. At 488.1 million barrels, US crude oil inventories are about 10% above the five year average for this time of year, according to the EIA.
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