Gold dropped as the dollar rose and U.S. stocks rebounded as investors assessed details of the U.S. tax overhaul legislation
Recent hawkish comments from Fed official hint at three more rate hikes in 2018 as long as inflation is stable. The Fed meets December 12-13 to announce its latest policy decision.
Also weighing on the dollar was ongoing expectations that the U.S. Federal Reserve will raise interest rates for third time this year at the conclusion of its next meeting on Dec.13. Yonhap reported that US B1 bombers plan flights over the Korean peninsula Wednesday as part of an annual military exercises that rile Pyongyang.
The American Petroleum Institute reported that US crude stocks fell by 5.481 million barrels, more than the 4.1 million decline seen. The API data showed a jump of 9.2 million barrels in gasoline stockpiles, while inventories of distillates rose about 4.3 million barrels, sources said. Goldman Sachs raised its 2018 forecasts on Brent and WTI to $62 per barrel, and $57.50 a barrel, respectively.
Tight stock positions due to restricted arrivals from the major producing belts of Chandausi is also giving support to the mentha prices. With the onset of winter the seasonal and export demand of mentha is improving which is also one of the reasons for rise in prices. Stock positions of mentha in MCX accredited warehouses were around 8537 drums which is 192 drums less in comparison to the previous day, while in process were 408 drums which is same against the previous day.
Soybean prices were also up as farmer are hoarding their produces in expectation of higher prices in near-term. In a bid to provide support farmers and curb distress selling National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) has been purchasing soybean in the markets of Telangana, Rajasthan and Maharashtra, said a senior official.
According to trade sources, about 60 lakh bales have arrived in the Indian markets this season compared to 47.3 lakh bales last year till Dec 1. Production of cotton in India in the current season started Oct 1 is likely to decline 7-8% to around 350 lakh bales (1 bale = 170 kg), primarily due to severe pink bollworm attacks in Maharashtra, Gujarat and Telangana.