1/21/2011 06:47:00 PM
Your Advisor
MCX Trend
Gold prices traded in the negative territory today, as positive economic data from Germany helped ease concerns with regard to the Euro Zone debt crisis. Any signal of economic recovery in the US and the Euro Zone is expected to lead to downside pressure on the yellow metal. On the MCX, gold prices declined around 0.5 percent till 5.00pm IST.
Base metal prices also received support on news of improvement in German business confidence. Copper, the leader of the base metals pack gained almost 1 percent till 5.00 pm IST. But prices may come under pressure as latest data indicates that China’s refined copper imports declined 8.4 percent in 2010 to 2.92 million tonnes as against a record high 3.19 million tonnes touched in 2009. Annual apparent consumption of refined copper in China also grew at a slow pace of 4.6 percent in 2010 as against growth of 38.9 percent in 2009.
MCX Outlook
There is no economic data to be released from the US today. We expect commodities to take cues from recent positive business confidence data of Germany. On the back of improvement in sentiments, we expect gold prices to come under pressure. Base metal prices are expected to rise as sentiments improve over recovery in Germany, Euro Zone’s largest economy. But sharp gains in copper will be capped as data indicates a decline in Chinese imports for 2010. Crude oil prices are expected to trade in the positive territory as market sentiments improve on positive European economic data. Dollar weakness will additionally support upside in oil prices today.
NCDEX Trend
Guar futures may trade firm in the intraday on expectations of improved demand from the local and overseas buyers. In the short term (2 - 3 weeks), we expect Guar prices to improve due to increase in the fresh export enquires and trade in the range of Rs. 2600 and Rs. 2750 per qtl. In the medium term (2 months), prices would be dependent on the overseas demand scenario.
Chana prices in the intraday may trade sideways to firm due to improved buying at the support levels. Reports of crop damage in M.P and demand from the domestic stockists might also help prices to gain. In the short to medium term weather would be an important factor to term, be watched for as the final estimates on the crop would mainly depend on the weather conditions during the crop development period.
Sugar Review
Sugar prices are expected to decline further in the intraday due to sufficient supplies in the domestic markets. Currently, Sugar prices at Kolhapur are trading around Rs. 2800 per qtl levels. We expect Spot prices at Kolhapur to trade in the range of Rs. 2750 and Rs. 3000 per qtl levels for the rest of the month. Ongoing crushing may put some pressure on the prices. However, any significant decline in the prices due to crushing may be treated as a good buying opportunity for the medium term term. In the medium to long term domestic Sugar price movement would be dependent on the permissible sugar exports from the country. Domestic sugar could gain if exports are allowed given the high sugar prices prevailing in the global markets.
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