CAPITALSTARS MCX COMMODITY MORNING UPDATES - 14 DEC 2017

Gold on MCX settled up 0.19% at 28195 and trend remains positive as the Federal Reserve hiked interest rates but hinted at a "wait-and-see" approach to further rate hikes. As expected, the Fed raised the benchmark U.S. interest rate to a range of 1.25% to 1.5%. However, the Fed maintained earlier forecast for just three 1/4-point rate hikes in 2018. Concerns about stubbornly low inflation prompted the cautious outlook. Underlying U.S. consumer inflation slowed in November, held down by weak healthcare costs and the biggest drop in apparel prices in nearly two decades, which could impact the pace at which the Federal Reserve raises interest rates next year. The European Central Bank is likely to bump up some of its economic forecasts on Thursday and may debate tweaking its pledge to keep money at its current, ultra-easy level, but will ultimately reaffirm is policy stance. Congressional Republicans reached a deal on final tax legislation, clearing the way for final votes next week on a package that would slash the U.S. corporate tax rate to 21 percent and cut taxes for wealthy Americans. UK Prime Minister Theresa May's government was defeated, when lawmakers forced through changes to its Brexit blueprint that ministers said could endanger Britain's departure from the European Union.

Crude oil on MCX settled down -0.98% at 3656 after data showing crude stockpiles fell for the second straight week failed to offset a larger-than-expected build in gasoline supplies. Inventories of U.S. crude fell by roughly 5.1 million barrels for the week ended Dec. 8, beating expectations of a draw of 3.8 million barrels. Gasoline inventories – one of the products that crude is refined into – rose by 5.7 million barrels, well above expectations for rise of 2.5 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by about 1.4 million barrels, above expectations for a build of 902,000 barrels. Also weighing on crude prices was a rise in production to record highs as data showed weekly U.S. crude production jumped by 73,000 barrels a day to 9.78 million barrels a day. The EIA’s report comes after OPEC revealed in its monthly report that production in November, fell by 133,000 bpd to 32.5 million bpd but revised upward its 2018 forecast for non-OPEC output. OPEC forecasts non-OPEC supply growth to rise by 120,000 barrels per day (bpd) to 990,000 bpd. The oil-cartel said, however, that the 2018 forecast for non-OPEC supply is “associated with considerable uncertainties”. US oil supply is now expected to grow by 1.1 million bpd in 2018, an upward revision of 180,000 barrels, according to the report. Rising non-OPEC production has added to fears that oil producers not part of the production-cut agreement would continue to ramp up output, slowing the rebalancing in markets.

Copper on MCX settled up 0.63% at 437.25 as prices extended a correction from last week’s sharp fall, but moves were muted ahead of an expected interest rate increase from Federal Reserve. China’s central bank nudged money market interest rates upward on Thursday just hours after the Federal Reserve raised the U.S. benchmark, as Beijing seeks to prevent destabilizing capital outflows without hurting economic growth. The People’s Bank of China called it a “normal market reaction” to the Fed that would keep interest rate expectations reasonable and help with the deleveraging campaign. China’s industrial output and retail sales grew at a steady pace last month, while fixed asset investment cooled slightly, reinforcing signs of a modest slowdown in the world’s second-biggest economy amid a government crackdown on financial risks. Tighter rules on polluting factories have also crimped production, while higher borrowing costs have weighed on overall economic activity. Thursday’s data showed industrial output rose 6.1 percent in November from a year earlier, just above analysts’ estimates for an increase of 6.0 percent, and below the 6.2 percent gain in October. Glencore sees global copper demand to increase by 4.1 million mt by 2030 as ceo Ivan Glasenberg believes total electric vehicles sales would surge to 31.7 million units by then, from 2.1 million units in 2020.