Metal sees profit booking, baltic index declines 8%
Base metal prices also saw some sell off on Thursday, Friday and today that actually is being carried on. The Baltic Dry Index also declined 8% on Friday after 5% of a decline on Thursday. So the profit taking was happening across the board in all of those commodities.Friday was very exciting and we saw US dollar gain nearly 1.6%. Dollar index was up 1.8% in the last week but at this point of time it is trading off those highs. There also talks of Fed rate hikes sooner than expected – markets are giving in 70% for a Fed rate hike by November. Previous week it was 24% but those numbers have actually gained quite strongly in the last week itself. In other currencies, GBP – it continues to be on the weaker side because of UK political uncertainty. Most of those Asian currencies actually are quite mixed, not too much gains seen in those. The India Rupee has also dropped because of US dollar gain and decline in our own stock markets but it has been able to very successfully hold above Rs 47 per dollar.
The USD INR June Futures is trading at 47.50; we have seen a gain of nearly 30 paisa there as well. So quite a bit of weakness is what you are seen in the India counterpart there as well.
But the strength in US dollar has led to a decline in commodities. The crude prices were trading at USD 70 per barrel plus in the US markets on Friday but those have been trading below USD 68 per barrel in the Asian markets right now. If you look at gold and silver prices, those also declined nearly 2-4% in the last week especially on Friday and the losses are actually kind of holding as we trade in Asia right now.
Base metal prices also saw some sell off on Thursday, Friday and today that actually is being carried on. The Baltic Dry Index also declined 8% on Friday after 5% of a decline on Thursday. So the profit taking actually is happening across the board in all of those commodities. At base metal prices, there is ample liquidity that the markets are pointing on that has played up the base metal prices. The fundamentals continue to be on the weaker side. China has entered into a seasonally slow consumption period and the rest of the world anyway hasn’t seen too much of a demand recovery happen there.