COMMODITY OPENING BELL

Bullion - Opens on negative Note Gold -28950-28970 Silver -38450-38500 

Energy - Opens on mixed Note Crude Oil -3075-3085 Natural Gas -188-187.50 

Base Metals - Opens on mixed Note Copper -410.50-409.50 Nickel -666-667 Lead -151-152.50 Zinc - 190-191 Aluminium -131-132

COMMODITY MARKET NEWS

Precious Metals 

Precious metals are likely to open flat after a selloff yesterday as geo-political tensions eased and as the US dollar rebounded after positive US data. The rhetoric between US and North Korea which had kept markets on the edge has toned down in the past couple of days and there are clear attempts to deescalate. US economic data also provided a positive surprise as retail sales jumped 0.6% in July, the most in seven months and the June reading was also revised higher to 0.3%. Inflation however remains a concern which has kept rate hike odds lower. The headline CPI grew by 1.7% y/y in July, less than expectations of 1.8% while core CPI was unchanged at 1.7%. The focus will be on how US data and geopolitical factors pan out in the coming days. The FOMC minutes will provide more cues today. If global sentiment improves, there is a likelihood of further profit-taking in precious metals. 

Base Metals 

Base metals are likely to open higher with zinc rallying to its highest in a decade, boosted by rally in steel prices. Aluminium is extending gains due to capacity cuts in China to clean up its skies ahead of the winter heating season. Nickel ore output in Philippines fell 24% in first half of year as several mines stopped operations due to government sanctions and bad weather. Data from ING showed that increased production from Indonesia is impacting nickel’s supply chain which is narrowing market’s deficit.

Energy 

Crude oil is likely to open flat after selloff in last couple of sessions on worries about stubbornly high supplies. EIA data indicates that US shale production is likely to rise by 117,000 bpd to 6.15 million bpd in Sep, its ninth consecutive monthly rise.