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Commodity Market Updates for 12 Sep, 2016

Gold prices fell in Asia on Monday with focus on prospects for a U.S. rate hike as key Fed policymakers continue to stress the need to act even as data sets key for any decision show mixed progress. Gold futures for December delivery on the Comex division of the New York Mercantile Exchange eased 0.18% to $1,332.05 a troy ounce. Also on the Comex, silver futures for December delivery dropped 1.30% to $19.117 a troy ounce and copper futures for December delivery were last quoted flat at $2.089 a pound.Earlier, Japan reported core machinery orders jumped 4.9% month-on-month in July, a second straight monthly increase and well above the 3.5% fall seen, and showed a 5.2% gain year-on-year, compared with a 0.3% increase expected. The data highlight strong growth in a key segment of the economy. At the same time, PPI figures from Japan showed a 0.3% fall in August month-on-month, compared with a decline of 0.2% expected and a drop of 3.6% year-on-year, compared with a 3.5% decline seen. The weaker than expected producer prices signal continued stubborn inflation prospects. Several markets in Asia and elsewhere around the globe are shut on Monday to mark Eid al-Adha, including Singapore and Indonesia. Last week, gold prices fell for the third straight session on Friday, pressured lower by a stronger dollar and renewed expectations for a near term interest rate hike by the Federal Reserve. The dollar recovered after Boston Fed President Eric Rosengren said Friday that “a reasonable case can be made” for hiking rates in order to avoid overheating the economy. The dollar had come under pressure earlier in the week after a report on Tuesday showing that U.S. service sector activity slowed in August to its lowest level since early 2010. The weak data, coming after last week’s lackluster U.S. jobs report dampened expectations for a rate increase at the Fed’s next meeting, which is scheduled for September 20-21.The Fed raised interest rates for the first time in almost a decade in December. Investors currently price a 24% chance of a rate hike at the Fed’s September meeting; according to federal funds futures tracked’s Fed Rate Monitor Tool.