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Informist, Wednesday, Sep 11, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India today, tracking gains on the London Metal Exchange because of the weakness in the dollar ahead of the US inflation data due later today. The sentiment was also supported by a fall in stocks in LME-registered warehouses.

According to a Dow Jones poll, US CPI inflation is seen rising 0.2% on month in August. The CPI data is likely to provide more cues on the quantum of interest rate cut by the US Federal Reserve next week. According to the CME FedWatch tool, the probability of a 25-basis-point interest rate cut by the US Fed is 67% and that of a 50-bps cut is 33%.

At 1631 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 101.42, down 0.2%. A weaker greenback makes dollar-denominated commodities, such as base metals, cheaper for holders of other currencies.

Traders are also awaiting the European Central Bank's monetary policy on Thursday. The European Central Bank was the first major central bank to cut key interest rates by 25 bps in June. A rate cut would aid the demand for base metals.

However, a bleak outlook for demand in top metals consumer China capped gains in base metals prices, analysts said. "With Beijing showing no signs of introducing big-bang fiscal stimulus measures to arrest a slowdown in economic growth, the mood is likely to remain weak," SMC Research said in a note.

COPPER prices rose, tracking gains on the LME because of a weaker dollar.

ALUMINIUM prices rose, tracking gains on the LME as aluminium stocks in LME-registered warehouses fell by 3,500 tn to 831,350 tn.

ZINC prices rose, tracking gains on the LME as zinc stocks in LME-registered warehouses fell by 2100 tn to 234,450 tn.

At 1632 IST, on the MCX, the September futures contracts of:

- Aluminium was at 222 rupees per kg, up 1.1%

- Copper was at 791.20 rupees per kg, up 1%

- LEAD was at 182.90 rupees per kg, up 1%

- Zinc was at 258.80 rupees per kg, up 1.6%

Trading levels for the day on the MCX:

- Aluminium contract seen at 217.95-224.00 rupees 

- Copper contract seen at 785-795 rupees

- Lead contract seen at 178.95-184.00 rupees

- Zinc contract seen at 253.65-262.00 rupees

End

US$1 = 83.98 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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