1. DAILY MCX NEWSLETTER
DEC.
17-DEC. -2013
THE EQUICOM PROFIT UPDATE: PLEASE CLOSE YOUR POSITION IN COPPER, OUR SL TRIGGERED
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2. BULLION
BASE METAL
ENERGY
India Government drive to reduce gold
Copper surplus is expected to widen and
The inflation surge in November was caused
consumption to discourage gold imports,
outpace demand growth in 2014, according
by rise in prices across categories- fuel, food
reduce Current Account Deficit (CAD) also
to International Copper Study Group
articles, non-food articles and manufactured
caused increase in smuggling activity and
(ICSG).
products.
reduced gold jewellery exports.
ICSG pointed out that surplus is expected
"Momentum indicators suggest that while
Alarmed by the huge increase in gold imports
to grow from 387,000 tons this year to
inflation in primary articles is likely to
that cause foreign exchange outgo of $56.8 bn
632,000 tons in 2014.Global copper demand
moderate in the coming months, inflation in
in 2012-13, India government hiked import
is expected to increase by 4.5% in 2014 as
manufactured products could accelerate
duty on gold to 10% in different stages from a
economic recovery gains steam
further. Momentum in manufactured product
low rate of 2%.
internationally.
categories - food, textiles, basic metals, alloys
A variety of measures were taken by Finance
Refined copper production to rise 5.5% to
and metal products, shows an upward trend,
Ministry and Reserve Bank of India (RBI) to
22.1 mn tons next year on China production
partly reflecting the adverse impact of the
curb consumption of the yellow metal
gains. In 2013- it grew 3.9% to 20.9 mn tons.
weak rupee on imported inflation," according
including the introduction of the stipulation
Projects deferred during financial crisis will
to CRISIL Research.
that one fifth of the imported bullion had to
go onstream in 2014-15 increasing mine
With a weak rupee and rising fuel prices,
be exported in value added form.
output
margins of producers are under stress. The
The measures to discourage imports led to fall
World mine output to surge 11.4% to 18.6
extent of rising input costs being passed on to
in gold and silver import value to $25.5 bn in
mn tons in 2014.
consumers is likely to rise further, especially if
the first eight months of 2013-14 compared to
Copper witnessed some uptrend in LME
household consumption begins to improve,
$33.5 bn last fiscal. However, large number of
this week climbing to $7159 a ton on weak
following a normal monsoon, and a
smuggling incidents have been reported since
dollar, China demand for the metal
consequent increase in farm incomes. Given
May at various international airports in the
although the metal has fallen close to 10%
the rising inflation - both at the retail and
country.
year-to-date.It broke below $7,000 a tonne in
wholesale level, the RBI with inflation control
mid-November after holding in a $7,000-
as its prime objective, is set to hike the repo
$7,400 range since August.
rate once again later this week.
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