Page 108 - MEX-Yearbook-2017

MEX Almanac

October 2017

Precious Metals reduction in oil storages in the US and a strong economic indicator in
October witnessed a bullish momentum across the precious metals bracket China. Moreover, worsening relationship between United States and Iraq
except for gold. Gold hit the lowest in two months as the US Dollar rose to a and continuous reduction in the number of oil rigs in the US had helped
more than seven-week high and the reading of the U.S. employment rate and price rise. But, on the other hand, low demand of natural gas in the US led
wage growth on last month which supported the expectation of interest rate to the decline in its price. The low demand can be accredited to the normal
hike in December leading to higher dollar and treasury yields. U.S. Treasury seasonal conditions.
yields increased as investors focused on who would replace Janet Yellen as
the next chair of the Federal Reserve. Furthermore, the price shrunk after Brent Crude Open Close % Change
the European Central Bank (ECB)’s stance which stated that it would halve Crude Oil 5667 6114 7.89%
its bond purchases to 30 billion euros ($35 billion) a month from January, Heating Oil 5162 5448 5.54%
but extended the programme by nine months and kept the doors open for Natural Gas 47.79 49.74 4.08%
possible further extensions in time and amount. Silver price rose after U.S. 301.4 288.3 -4.35%
President Donald Trump warned he might ultimately end a 2015 nuclear
agreement with Iran and after weak US inflation data undermined the case Agro
for interest rate rises. Platinum was up due to the offsetting of short positions October saw a mixed trend in the agro commodity bracket, where
after the prices had declined to the lowest since July 2014. Both platinum and commodities like cocoa, soybean oil, soybean and sugar treaded north. The
palladium traded higher during October. Palladium climbed as countries vow price of cocoa had risen due to signs of improved demand with Europe’s
to reduce the sale of gasoline and diesel-burning cars. Palladium benefited third-quarter grind climbing to a six-year high. Moreover, improved
from the same surge in investor interest that had pushed up the price of metals demand helped to boost prices. However, coffee stumbled because of
used to make lithium-ion batteries in electric cars. stronger dollar and rainfall in top-grower Brazil. US corn also showed a
bearish pattern as North America’s harvest began to fill the market with
Gold Open Close % Change supply. Cotton prices fell by about 4 cents per pound in September, to
Silver 41227.5 40860 -0.89% finish the month at almost 67 cents, about 5.7% lower than at the end
Platinum 536.2 536.9 0.13% of August, according to the data from U.S. Department of Agriculture
Palladium 29392.5 0.66% (USDA). Expected damage from Hurricane Harvey led to price rise. But,
30050 29587.5 4.42% later damage from the storms turned out to be less, the price dropped.
31379 Due to the increase in demand of soybean, the price of soybean took a
bounce. According to the agricultural division of the United States, a
Base Metals total of 706500 tonnes of soybean was sold in China. Sugar prices went
Copper prices reached their highest level in four weeks as speculators up as mills in Brazil’s Centre South cut their allocation of cane to sugar.
kept buying in response to expectations of potential shortages in China. Furthermore, ongoing festive season in India supported the price. Due to
China’s producer price inflation unexpectedly accelerated to a six-month cold weather in the United States and weak US Dollar, the price of wheat
high in September as a construction boom showed no signs of abating went bearish this month.
and as a government crackdown on air pollution triggered fears of winter
shortages. The inflation reading followed data showing China’s copper
imports surged in September, fuelling optimism about demand.

Copper Open Close % Change Cocoa Open Close % Change
655.6 685.5 4.56% Coffee 204 209.1 2.50%
Corn 275.9 -1.85%
Energy Cotton 281.1 13.58 -2.65%
The price of energy commodities in the MEX terminal saw bullish tone in Soybean Oil 13.95 150.82 -0.40%
the month of October as the prices of Brent Crude, Crude Oil and Heating Soybean 151.42 76.58 5.72%
Oil moved towards north for the month. However, the price of Natural Gas Sugar 72.44 36.16 1.89%
saw bearish trend in the month. The investors have remained bullish after Wheat 35.49 32.48 4.57%
the news from Organization of the Petroleum Exporting Countries (OPEC) 31.06 15.33 -6.41%
that they will stick to production cuts. The prices of Brent Crude and Crude 16.38
Oil increased by 7.89% and 5.54% respectively. The main reason was the
The figures above are the percentage change in the prices of corresponding commodity over the
corresponding month. % change is calculated as ((Close-Open)/Open*100)

107 | MEX NEPAL YEAR BOOK 2017