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5 Best Commodity Market Ideas

Commodity markets are a little different in terms of trading from traditional equity markets and thus, here are 5 best commodity market ideas that can work in India.

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5 Best Commodity Market Ideas

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  1. Investmentz.com

  2. Commodity markets are a little different in terms of trading from traditional equity markets.  A commodity market is a market that trades in primary economic sector rather than manufactured products.  Soft commodities are agricultural products such as wheat, coffee, cocoa, fruit and sugar.  Hard commodities are mined, such as gold and oil.

  3.  Cautious to negative on MCX crude  Uncertainty factors could help MCX gold  Using bounces-to-sell strategy for copper might help  Going short-term negative on MCX zinc could be a good option  Long trade on NCDEX cumin on shortfall in supply could be a good option

  4.  OPEC is finding it increasingly difficult to influence crude prices, which means that MCX crude could come under pressure.  Moreover, Russia has joined the OPEC consortium in terms of cuts in crude supply.  However, the US appears to enjoy a few clear distinctive advantages in terms of expansion in crude supply.  Further, Trump has already withdrawn from the Paris Climate Agreement, which opens significant opportunities for the US for undertaking substantial expansion of its shale capacity.  Thus, going cautious to negative on MCX crude.

  5.  The World Gold Council has announced that the gold demand for 2017 will not be substantially more than the previous year.  Although India and China are the highest consumers of gold, gold prices will not be driven by consumption demand.  Moreover, volatility in North Korea and Middle East coupled with other global factors could influence the direction gold prices takes.  All these uncertainty factors could help MCX gold.

  6.  The fact that copper has corrected for two weeks on-the-trot gives it a weak outlook.  Thus, waiting for a bounce in price to sell could be a good strategy. Moody’s recently downgrading China doesn’t help copper prices either, since China contributes more than half of global copper demand.

  7.  Owing to environmental inspections, many zinc mines in the Hunan province of China were shut down. This led to subdued supply of zinc.  Post completion of inspections, zinc supplies have started flooding the markets, which has brought prices under pressure as well.  Moreover, strength of the US Dollar will weigh on MCX Zinc. Thus, going short-term negative on MCX zinc could be a good option

  8.  With more than 70% of the world’s supply of cumin, India is the world’s largest producer of cumin.  Other cumin producer such as Syria and Turkey are much smaller. Exports of cumin in India are expected to remain buoyant despite higher prices of the commodity.  The commodity saw decent open interest gains, which again indicate towards pricing heading upwards. Therefore, long trade on NCDEX cumin on shortfall in supply could be a good option.

  9.  To know more about commodity trading and for effective trading tips, please call us on 91-22-2858 4545 or contact us at http://www.investmentz.com/

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