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Commodity World Roundup

28th July – 03rd Aug – RBI taking measures for strengthening the economy and other global news

RBI taking measures for strengthening the economy and other global news

1. India's Demand from the jewelry sector slumped by eight percent to 147.9 tonnes, from 161 tonnes

Aug 03, 2018

Gold demand in India declined by around seven percent the reasons are an extra month ‘adhik maas’ in the traditional calendar, considered an inauspicious period, coupled with a range-bound price due to rupee depreciation. Demand from the jewelry sector slumped by eight percent to 147.9 tonnes, from 161 tonnes in the comparable period last year. And, investment demand fell by five percent to 39.3 tonnes, from 41.6 tonnes earlier.

Source: Business Standard

2. The Reserve Bank of India (RBI) has added some gold to its reserves after 9 years

Aug 03, 2018

The Reserve Bank of India (RBI) has added some gold to its reserves. According to the World Gold Council's (WGC's) trend report for the June quarter, the central bank bought 2.5 tonnes in March, following a fractional 0.3-tonne addition in December. These increases are the first since November 2009 when it bought 200 tonnes from the International Monetary Fund (IMF), said the WGC. In April and May, there were additions by the RBI of 600 kg and 900 kg, respectively. At present, the central bank's total gold holding is 561.9 tonnes.

Source: Business Standard

3. The Reserve Bank of India's (RBI) 0.25% hike in repo rate

Aug 02, 2018

The yields are expected to come down further in the coming weeks as RBI gives further comfort on liquidity as RBI hike in repo rate by 25bp (at which it lends money to banks) to 6.50% came with a neutral stance which cooled the yields in the government securities market. Government bond yields fell by 0.06%, closing at 7.70%. The neutral stance gave the market the status quo may be prolonged.

Source: DNA

4. RBI will continue to manage the system liquidity

Aug 02, 2018

RBI will continue to manage the system liquidity so as to achieve the monetary policy objective of aligning the overnight weighted average call rate with the policy rate, The Reserve Bank of India (RBI) has assured traders and bond buyers that it would conduct more open market operations, a device that infuses or extracts liquidity and prevents distortion in broader yields.

Source: PRESS READER

5. FII net inflows into equities have been marginal

Aug 01, 2018

Foreign institutional investors (FIIs) have been net buyers of Indian equities in July, in a marked reversal of the trend from the previous three months (see chart). FII selling in the debt markets to has been much lower. However, FII net inflows into equities have been marginal. And on a year-to-date basis, they remain net sellers in Indian stocks. What has changed? Actually nothing much, but things haven't got worse either. The ongoing trade conflict between the US and China is increasingly becoming a background noise for the Indian stock market. While a full-fledged trade war would be disastrous for the global economy, currently the situation is not as bad as feared earlier.

Source: Livemint

6. India should restrain oil imports from neighboring nations: sea

Aug 01, 2018

Under the South Asian Free Trade Area (Safta) arrangement, such oils can be imported from Safta members such as Bangladesh and Sri Lanka at nil duty, subject to a 30 percent value-addition norm. India’s cooking-oil traders’ body has urged the government to restrain imports of refined edible oil from its immediate neighborhood as increasing zero-duty sea shipments from Bangladesh and Sri Lanka could hurt local millers and oilseed farmers. The Solvent Extractors Association (SEA) has pointed out that refined palm oil imports from the country of origin attract 59.4 percent import duty, while refined soyabean oil draws 49.5 percent levies.

Source: Economic Times

7. Iran under pressure due to Trump’s crackdown

July 28, 2018

Since Trump pulled the U.S. from the accord in May, Iran’s currency has hit record lows on the black market and foreign companies including Peugeot parent PSA Group and Total SA have been scaling back operations. Banks are crippled by bad loans because of years of poor regulation. Sanctions that were lifted under the nuclear deal are now set to return within days, while Trump warned Rouhani not to threaten the U.S. or suffer the consequences.

Source: Financial Express

8. Precious metals have come under significant pressure

July 28, 2018

Precious metals have come under significant pressure as international gold and silver prices hit their lowest level in 12 months. In fact, the silver prices have declined for the seventh straight week in a row. It is not good news for platinum group metals as well. The platinum prices continue to decline and are trading at a discount to the gold prices in the global markets. It is also trading at the lowest level in the last 10 years.

Source: CNBC TV 18