Govt to take decision on export quantity of cotton this week.

The government is expected to take decision on exportable quantity of cotton this week. The move follows recent lifting of the export ban on the cotton which was imposed earlier this year to restrict spiraling prices in the domestic markets. The Central government is also mulling to abolish the export tax from October 1.

The decision on how much quantity of cotton to be allowed to be exported will be decided after the textiles ministry reviews the level of cotton production for the current year on September 01. Few industry experts are saying that the cap on the exportable quantity may be fixed at 5 million bales (1 bale = 170 kg).

Exports up to the restricted limit may not be charged any export tax while anything above that will be subject to prohibitive tax regime, as indicated by the Commerce secretary Rahul Khullar.

Gold, silver futures settle higher on MCX.

Mumbai - Gold, silver futures settled with nominal changes on Multi Commodity Exchange on buying support here on Saturday. In the overseas market gold settled down profit taking. In the overseas market gold settled traded down USD 2.40 at 1227.70/oz.

On MCX, gold August futures traded up Rs.11 and silver September futures up Rs.22/kg.

MCX's most active gold August contract opened down Rs.4 at Rs.18,715/10gm and moved between Rs.18,712-18,730/gm. The contract settled up Rs.11 at Rs.18,730/10gm. August contract volumes recorded 964 lots.

MCX gold mini, the most active September contract opened down Rs.6 at Rs.18,678/10gm and settled up Rs.6 at Rs.18,690/10gm. It fluctuated between Rs.18,677-18,693/10gm. Total volumes in September contract clocked 1635 lots.

Gold and silver daily review (August 21, 2010)

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MARKET ROUNDUP


US Gold rose on Thursday to its highest price since July 1, rallying for a sixth day as disappointing U.S. jobless claims data rekindled economic fears, sent stock markets lower and prompted investors to buy gold as a safe haven.


IN FOCUS


- The world's largest gold-backed exchangetraded fund, SPDR Gold Trust, said its holdings rose to 1,299.468 tonnes by Aug. 19 from 1,295.516 tonnes on August 18.


- The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its holdings stood at 9151.03 tonnes as of August 19, unchanged from the previous business day.


- The world's top pure silver mine, San Bartolome, has resumed production in Bolivia, owner Coeur d'Alene said on Tuesday, a day after demonstrators ended protests that brought mines in the Andean country to a halt.


- Newcrest Mining, Australia's top gold producer reported a record full-year underlying profit on Monday, topping forecasts, and flagged a near doubling in capital spending to develop Australia's largest underground mine.


FUNDAMENTAL OUTLOOK


Precious metals prices edged down on COMEX today. We may witness some profit booking in the counter today. But overall outlook for precious metals remains bullish on the back of sparking worries of deepening slowdown in the global recovery is likely to support buying in gold as a safe-haven.

Gold prices rose to a seven-week high.

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Gold prices rose to a seven-week high on Thursday on getting disappointing data that US new claims for unemployment benefits unexpectedly hit a nine-month high last week, raising the safe heaven demand. The yellow metal’s technical outlook too looks good, supported by the economic worries. Some weakness in dollar against euro too supported the prices in late hours.

Gold futures for December delivery rose $4.40 to $1,235.80 on the Comex metals division of the New York Mercantile Exchange. Spot gold last traded at $1,233.30 an ounce, against $1,227.55 late in New York on Wednesday.

Spot gold prices closed at 1229/oz on Wednesday.

MARKET RECAP

Spot Gold prices continued to gain and closed at $1229/oz on Wednesday. The yellow metal prices touched a high of $1232/oz yesterday. However, on the MCX platform, gains in gold prices were restricted to around 0.1%, with the August October contract closing at Rs 18,673, up by Rs 30. Gold prices on the Indian bourses were capped mainly on the back of appreciation in the India Rupee. Spot Rupee closed at 46.56 against the dollar on Wednesday as against the previous close of 46.64.

OUTLOOK

Gold prices will continue to trade with a positive bias today as uncertain financial markets would continue to drive demand for the yellow metal. Moreover, increasing investment demand from the global investors coupled with expectations of increase in physical buying in India will also boost prices. India is the world’s largest consumer of the yellow metal. The upcoming festival season in India leads to higher demand for gold from the Indian investors.

On intraday basis, Spot Gold prices have immediate support at $1220/$1211 whereas resistance is seen at $1235/$1242. Spot Silver prices shall find support at $18.34/$18.10 whereas resistance is seen at $18.55/$18.77 levels.

Gold and Silver daily Review.

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MARKET ROUNDUP

US gold futures ended higher on Tuesday as the euro climbed against the U.S. currency, making the dollar-denominated metal cheaper for holders of other currencies.

IN FOCUS

- The world's largest gold-backed exchangetraded fund, SPDR Gold Trust, said its holdings rose to 1,294.604 tonnes by Aug. 17 from 1,286.699 tonnes on Aug. 12.

- The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its holdings stood at 9151.03 tonnes as of August 17, unchanged from the previous business day.

- The world's top pure silver mine, San Bartolome, has resumed production in Bolivia, owner Coeur d'Alene said on Tuesday, a day after demonstrators ended protests that brought mines in the Andean country to a halt.

- Newcrest Mining, Australia's top gold producer reported a record full-year underlying profit on Monday, topping forecasts, and flagged a near doubling in capital spending to develop Australia's largest underground mine.

FUNDAMENTAL OUTLOOK

Precious metals prices are trading marginally down on COMEX today. We expect gold to remain range bound on the back of absence of major trigger today. Gold is expected to trade in the range of $1220-1230/ounce today. These levels are good levels to go long in gold for medium term.