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MTECHTIPS COMMODITY MARKET NEWS 2

MTECHTIPS:-Gold slumps modestly on China PMI


Gold prices dropped slightly in Asian trading Friday after Chinas manufacturing PMI came in lower than expected. Signs that the economic recovery in the worlds second largest economy may be faltering stoked demand for the safe-haven dollar.Still, the data was not a complete disaster, so the losses in gold were limited.On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were down 0.04% to USD1661.35 a troy ounce in Asian trading, up from a session low of USD1,660.85 and down from a high of USD1,665.45 a troy ounce.Gold futures were likely to test support at USD1,655.35 a troy ounce, the low from January 28, and resistance at USD1,682.95 the high from Wednesday.The yellow metal was sluggish as data out of China came in surprising worse than expected. Economists had forecast an official Chinese manufacturing PMI of 50.90, actual result was only 50.40 -- down from the previous reading of 50.60.A reading over 50 signals economic expansion, while a reading under 50 suggests contraction. Although the report showed that Chinas manufacturing sector was expanding, the pace of expansion was worse than expected.

MTECHTIPS:-Crude oil near unchanged after employment data from Japan, US


Crude oil futures were largely unchanged during Asian trading Friday, after employment data suggested that the U.S. and Japanese economic recoveries may be faltering.On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD97.48 a barrel, down just 0.02% on the session. Crude oil futures were up from a session high of USD97.69 per barrel, and down from a session low of USD97.39 per barrel.Crude oil futures were likely to find support at USD95.96 per barrel, the low from January 27, and resistance at USD98.03 per barrel, the high from Wednesday.Early on Thursday, continuing jobless claims in the U.S. came in worse than anticipated. Economists had been expecting a reading of 3.176 million; the actual print was 3.197 million, higher than the prior weeks figure of 3.175 million.Then on Friday, Japans unemployment rate came in at 4.2%, worse than the 4.1% economists had expected. Japans household spending also fell more than anticipated, dropping 0.7% -- expectations were for a drop of 0.3%.With employment limited in the U.S. and Japan, and household spending dropping in the island nation's economy, the demand for crude oil might be expected to drop. Fewer people working suggests fewer commutes to work, and therefore less demand for fuel.

MTECHTIPS:-Steel market sentiments brighten in BRIC region: MEPS


Overall market sentiments in the BRIC (Brazil, Russia, India , China) region has brightened in January but dark clouds still loom in the horizon, according to an assessment by MEPS International.Stability is expected in Brazil where production is rolled steel is forecasted at 26.2 mn tons, an increase of close to 4% over previous year.- Russia steel demand trends arent bright- as doubt lingers on growth prospects in long steel and finished steel demand has fallen short of projections. -Indian steel industry is adding capacity to meet demand, iron ore supplies arent sufficient to meet demand. The Bureau of Indian Standards' (BIS) quality controls on coil, less than 6mm thick, wire rod and other steel products, comes into effect in March 2013-China consumption is expected to improve after Lunar Year Holdiays on firmer orders from construction, manufacturing sectors. The China Iron & Steel Association (CISA) has reported that the aggregate daily output of crude steel by the leading mills in the first

10 days of January totalled 1.944 million metric tonnes, an increase of 2.3 percent from late December.

MTECHTIPS:-Gold isn't going back to $1,000/Oz anytime soon: GHS


Gold would fall back to $1,000 an ounce any time soon, said Global Hunter Securities, LLC (GHS) in a research note.According to GH Securities, the mining industry has seen rampant cost inflation over the last decade and further cost inflation is anticipated.When gold was $300-$400 an ounce in the 1990s, the average cost of mining was less than $300 an ounce, allowing gold to remain economically viable. In today's gold industry, the average all-in cost of exploration, financial analysis, construction, mining and refining is most likely at or above $1,000 per ounce, the firm added.The rampant cost inflation across the industry has been for a variety of reasons, including: labor inflation, input cost inflation, higher construction costs, material price increases, etc. As a result, we continue to believe the floor for the price of gold in today's mining industry is in the $1,200-$1,400 per ounce range and that if gold were to decline toward these levels, there would be a significant slowdown in new gold mine construction and lower exploration expense by companies helping to support the gold price from a supply-side basis, Global Hunter concluded.

MTECHTIPS:-Brent futures to trade high on Israel's Syria hit; MCX too


With Israeli fighter jets reportedly attacking a military convoy in Syria, Brent crude oil futures and thereby MCX futures in India are destined to trade higher for the day. However fluctuations in Indian Rupee against USD should be watched out for crude oil price movements in Indian market.And with Syria replying that it has the option and the capacity to surprise in retaliation. it could well be gauged that the scenario in Middle East is turning messy.Brent futures for delivery on March 13 was spotted trading at $115.81 a barrel a gain of $0.24 or 0.21% as of 10.20 AM. Israel has not confirmed or denied the reported attack.The only factor that can play a dampener in futures climb would be the impact of data from China.Chinese PMI fared 50.4 in January according to the National Bureau of Statistics and China Federation of Logistics and Purchasing, an official agency.

MTECHTIPS:-FMC takes steps to curb excessive use of algo trades in Indian commexes
India's commodity market regulator, Forward Markets Commission (FMC) has come out with a set of uniform regulations on Friday with a view to curb excessive use of alogrithmic trading in futures markets.The Commission has said that the orders of clients are routed through member server only and client orders are not placed directly to the Exchange System. The exchanges shall not approve algorithms that may not be conducive to efficient price discovery or fair play.The exchange shall also subject the systems of the member to initial conformance tests and ensure that the checks mentioned in the guidelines are in place. Immediate Or Cancel (IOC) orders shall not be allowed to be placed using algo trading.The algos which will 'take liquidity' away from the market shall not be approved. While approving algo strategies, Exchanges shall record the reason as to why these are allowed and how it will induct more liquidity in

the contract/system.Exchanges will also make half-yearly review of effect of the approved strategies on liquidity and would discontinue Idisapprove any strategy which fails to induct liquidity.