Draft Gold policy expected soon, rupee hovers around 70 levels & Crude crashes to its lowest level in 2018

15th Dec – 21st Dec

1. Gold prices trade higher after Fed meeting

December 20, 2018

Gold prices jumped in the domestic markets following a positive move in global gold prices. Local jewelers also bought gold and supported this move. In global markets, gold prices continued a bullish move supported by a weakness in the US index and selling in equities. The US Federal Reserve hiked interest rates by 25 basis points as widely expected.

Source: Live Mint

2. After US inventories build up, Saudi plans to slash exports

December 13, 2018

Saudi Arabia plans to cut exports to the world's largest oil market in the coming weeks in an effort to dampen visible build-ups in crude inventories. US Crude oil inventories are rising along with an increase in production and misbalancing world crude prices which have seen more than 36% slump in the last two months from the October highs.

Source: Bloomberg

3. Rupee recovered over crude decline and equity rally from recent lows after the new RBI Governor appointment

December 20, 2018

The rupee continued its rally after the new RBI governor Shaktikanta Das took charge and emphasized the need for a consultative approach to tackle various economic issues. Recovery in the domestic equities market was supportive for a fresh recovery in the Indian rupee against the dollar. Crude oil prices crashed to new lows and trade talks between US and China are improving sentiments

Source: Economic Times

4. Khalid al-Falih , Saudi energy minister, expects oil inventories to fall by end of first quarter

December 19, 2018

Saudi energy ministers expect global oil inventories to fall by the end of the first quarter once OPEC+ starts cutting supply to balance the oil market from over supply and slowing demand due to bad economic conditions after the US-China trade war.

Source: Reuters

5. UCO bank is preferred for payment under Iran-India crude trade post US sanctions

December 19, 2018

It was expected that India will use UCO Bank Ltd. and this payment arrangement will allow India to continue oil purchases despite sanctions as it fulfills President Donald Trump's goal to choke money going directly to Iran. India and Iran followed a similar approach during 2012 where 45 percent of the dues were paid into escrow accounts in India. UCO bank will also be benefited by this move as its profitability and Current & Savings Account Ratio (CASA) will also improve.

Source: Financial Express

6. Crude crashed to lowest level in 2018 on increased supply

December 20, 2018

Brent Oil entered in a negative territory after four weeks of consolidation between $58-$62 per barrel. The oil market is expected to remain over supplied during early 2019 due to higher production and demand may not pick up under the shadow of tariff war between US-China. More weakness is seen below $57.50 till $54.10- $52.90 per barrel. Russian oil output is so far this month at a record 11.42 million bpd. Libya's state oil company has declared force majeure at the country's largest oilfield. The Fed meeting concluded yesterday with the US growth forecast cut down for 2019, which is termed to be negative for prices.

Source: Reuters

7. Gold may become asset class in India after new policy by government

December 18, 2018

To facilitate gold consumer with gold investment and push the Gold monetization Scheme, the government is planning for a new draft policy, which is a welcome step. India imports nearly 800 tons of gold to meet domestic jewelry and investment demand, with 10% charges of import duty and additional 3% GST on Jewelry which makes imported precious metals costlier. India desperately needs a bullion bank and a spot gold exchange which will also support the domestic bullion industry and will give further push to the "Make In India Initiative". India will also put a step towards creating its own gold delivery standard such as LBMA.

Source: Economic Times

8. Indian Rupee Likely To Remain Highly Volatile Till June 2019 after crude decline

December 17, 2018

Strength in Indian rupee kicked off once crude oil prices dropped by 30% since the October peak. Indian rupee also recovered losses from 74.46 to 69.56 or 6.5% from its lowest level. Other than crude price slump, many global economic and political events are affecting the rupee move in the near term. Oil supply cut by OPEC+ nations, US-China trade tussle and Brexit are few of it. The Fed meeting this week is expected to give fresh direction to the US dollar and will have a significant impact on the Rupee as well.

Source: DNA