10/18/2010 05:55:00 PM
Your Advisor
MCX Commodity Review
Spot Gold prices declined yet again, as expected, and were trading at $1360/oz till 4.00 pm IST today. The yellow metal prices are currently witnessing profit
booking after a sharp rally which has broken record highs both in the international markets as well as on the Indian exchanges. The US Dollar Index (DX) gained around 0.3% against the basket of six currencies in the afternoon trade and was trading at 77.27 till 4.00 pm IST. However, the DX softened after
touching an intra-day high of 77.65 touched in the Asian trade today. Indian domestic equity markets opened in the red today but rebounded strongly to
end in the green after declining more than 1% in the opening trade.
Copper prices declined around 0.4% on the LME and were trading at $8380/tonne till 4.00 pm IST today. The strength in the DX kept the red metal prices under check. Copper prices also trading under pressure on concerns over slow economic growth in China, the major driver of base metal prices. China’s GDP growth is expected to slow down in the third quarter. Markets are expecting a GDP growth of 9.5% in the third quarter, down from 10.3% in the second
quarter and 11.9% in the first quarter. Copper inventories on the LME decreased by 475 tonnes to reach at 371,025 tonnes today.
Crude oil prices declined around 0.5% on the Nymex in the afternoon trade today. The November crude oil contract on the Nymex was trading at $81.11/bbl
at 4.00 pm IST after touching an intra-day low of $80.35/bbl. Crude oil prices witnessed declines mainly on the back of strength in the DX which exerted
pressure on oil prices. Expectations of slower GDP growth in China is also affecting crude oil prices negatively as the Asian tiger has overtaken the US as the world’s largest consumer and slowdown in GDP growth would raise concerns over declining demand for crude oil.
Guar futures touched a high of Rs. 2121 per qtl level, due to lower availability of quality crop. Guar prices will take cues from the arrivals in the domestic mandi in the coming days. The demand for Guar seed and gum at lower prices levels
still persist which may support Guar prices and may control prices from falling sharply.
Chana prices gained more than 6% in the last 2 weeks on emergence of fresh demand ahead of festive seasons. Expectations of drop in Chickpe . According to the market sources, MSP of Chana which was set at Rs. 1760 per qtl in the last year may increase to Rs. 2100 per qtl. This will support the Chana prices as; no
farmer will sell their produce below Rs. 2100 per qtl.
Turmeric - Demand from the overseas and domestic market is keeping the Turmeric prices firm. Further, lower ending stocks of turmeric will help prices to find support in the short term ahead of festivals. Thus, near month contract may not witness sharp fall. Turmeric prices in the medium term (November onwards) will depend on growth of the sown crop. Further, demand from the domestic and overseas buyers will also determine the price trend in the above period.
