Gold prices are ruling above $1000 per ounce and there is no bull stops for the yellow metal even after Diwali in India.
Market analysts are still clueless about the future of the metal as a prediction of gold’s future course is almost impossible at present.
Still most of the analysts favour one thing that the metal will continue its bull run for some more time.
Some analysts said the Asian Financial Crisis in 1997-98 resulted in an accumulation of forex reserves over the last decade. After amassing forex reserves in US treasuries, many Asian economies and export-oriented countries have exhausted their appetite for US debt.
The slow divestment from US treasuries to gold and other precious metals will impact the price of gold. An increasing proportion of forex reserves is being held in gold as countries realise that this could also be a sensible hedge against a slumping US dollar.
Certain other sections of the market said gold, like most other commodities, is a dollar-denominated asset. Any significant movement in the US dollar directly impacts the price of gold.
The commodity bull market cycle will considerably impact the long-term price of gold. Commodity cycles usually last 15-20 years and this one, which started in early 2000s, will peak between 2017 and 2020. Prices of steel, copper, sugar and oil have risen significantly from the early 2000 and will continue to do so steadily for another decade or so.
The supply-demand equation of an asset is what determines its price in the marketplace. Like many other commodities, the supply of gold will always be constant and increase slowly as mines become operational and new technologies to unearth gold are invented.
But the demand for gold can surge if there is a sudden perception of weakness in a currency, the economy or the stock market. New highs in gold prices clearly reflect that demand for gold is rising and will continue to.
The Indian festival season could give a temporary impetus to gold prices and help sustain the bullish run. Although not a driving factor in the long-term price of gold, the appetite of the common man for gold in countries such as India and China does impact the price.
Thursday, 22 October 2009
Monday, 19 October 2009
Commodity Trends: Gold rallies, copper in pressure
The National Multi-Commodity Exchange of India (NMCE) has launched 11 new futures contracts in agricultural commodities and gold for January, February and April 2010 delivery. The futures contract in gold, cardamom, copra and guargum will expire in January 2010 delivery, it said. The three contracts, rape mustard seed, rubber and sack, will close in February next year, while the rest four contracts - castor seed, isabgulseed, pepper and one kilo gold contracts - will expire in March 2010, it added.
The Centre has fixed wheat prices between Rs 1,379.7 and Rs 1,728.23 a quintal for sale from the stocks it is holding in the open market. According to a note sent by the Food Ministry to the Food Corporation of India (FCI), tenders will be floated for sale of wheat between October and December in each State/FCI region and depot-wise bids would be invited. Seven days notice will be given to bidders.
Kerala has become the top producer of cashew nuts in the country thanks to the initiative under the National Horticulture Mission. It presently produces 6,100 tonnes (more than 50 per cent of the national output) with a productivity of 685 kg/ha. And additional area of 1,035 hectares under new planting and rejuvenating cocoa plants in 680 hectares is being undertaken under the National Horticulture Mission scheme.
The BSE, NSE, MCX, forex, bullion and commodities markets are observing a holiday on Monday on account of ‘Bhaubeez’. The Bombay Stock Exchange's main index closed at 17,326.01 points in the Moorat trading session on Saturday. The Nifty closed flat at 5,141.80
Gold
Benchmark December Gold futures at MCX rallied this week to Rs 16048 per 10 gms before settling to a modest figure of Rs 15831 at close of trade on Friday. Higher prevailing prices failed to lift retail market sentiments on ‘Dhanteras’ the biggest gold buying festival in the country. Weaker rupee helped gold climb from a fall towards weekend as weaker rupee makes the dollar-quoted asset expensive.
Rupee witnessed up and down movements on choppy trade on Friday as domestic shares failed to provide a clear direction, while dollar demand from importers and mostly lower Asian units also weighed on sentiment. Profit taking at current levels could bring down MCX gold contract to Rs 15600 levels before stabilizing.
In USA, gold futures ended higher on Friday on strong investment buying and worries about financial sector following quarterly loss posted by Bank of America. At Comex, December gold futures rose 90 cents at$1,051.50 an ounce after recording a high of $1072 on Wednesday. Gold rose to new peaks above $1,070 levels per ounce on Wednesday as the greenback continued to slide against a basket of six currencies, although there were worries that the metal may have become overbought.
Analysts pointed out that gold’s recent rise was fuelled by currency worries rather than inflation. Oil rally towards $78 raises inflation concerns that supports gold, Pull back is likely in gold prices as open interest is staying above 500,000 lots in Comex. Meanwhile, silver is looking for direction from gold with spot silver prices at $17.41.
Gold is likely to show weakness on eroding jewelry demand and might decline to $1025 and toward the psychological $1000 mark.
Base Metals
US copper futures traded lower towards weekend on firmer dollar and fears about increasing supply and fall in near term-demand for base metals. Copper is facing pressure from the extended gains in dollar versus the Euro. COMEX copper warehouse stocks went up 135 short tons on Thursday, bringing total levels to 56,852 short tons.
Stronger rupee weighed on sentiments during mid-week at MCX where its November contract showed weakness. However, eventually weaker rupee did not harm the contract as optimism on the global economy and strong demand from China helped sustain prices at Rs 291 levels.
MCX Copper futures are likely to be range-bound at Rs 287-295 next week and face resistance at Rs 297 levels. The October Zinc contract at MCX ended marginally up at 93.90 while lead for October delivery was also marginally up at Rs 101.65.
Energy
Bullish sentiments prevailed in US crude futures market and on Friday it extended gains for the seventh straight session and closed a the highest level in a year, lifted by a late rally. Other in the oil complex including heating oil futures recorded 11-month highs. On Nymex, November crude settled higher at $78.82. The contract gained 9.42 percent the highest since October 2008. Unexpected steep declines in US gasoline and distillate inventories helped support the oil rally. Rising oil prices also lifted US energy shares even as financial sector was down on Bank of America’s reported quarterly losses. October Futures for crude oil at India’s MCX traded at Rs 3610 on close of session last week.
Soybeans
Soybeans recovered towards weekend tracking gains in global markets but was checked by likely rise in arrivals in the next few weeks. The benchmark December palm oil futures on Bursa Malaysia Derivatives Exchange ended at 2,178 ringgit a tonne, up 3.17 percent.Palm oil and soybean are related commodities and their prices often move in tandem. In US, soybean advanced as dollar fell to 14-month lows and crude oil rose to a high above $78 per barrel.
Increased market arrivals could put pressure on prices in the days ahead. Madhya Pradesh and Maharashtra will witness increased arrivals putting downward pressure on prices. Soybeans October Contract at MCX rose marginally to Rs 2082 while November contract rose to 2092
Pepper
India pepper futures ended slightly higher on Friday buoyed by spot demand but gains were limited by the Brazilian crop, analysts said. Markets remained volatile, absence of selling pressure and the speculative activities helped prices to rise marginally.
Pepper futures market on Wednesday witnessed a sharp fall on bull liquidation due to shortage of time for carrying forward before the maturity of the October contract on the 20th. Add to this there were reports of decline in prices in Vietnam and Indonesia. The domestic demand also failed to pick up as expected.
October contract fell by Rs 315 a quintal on NCDEX to close at Rs 13,690. November and December dropped by Rs 276 and Rs 265 respectively to close at Rs 13,867 and Rs 14,040 a quintal.
Spot markets continue to to be dull and will resume in full swing after Diwali holidays from October 23. The Brazilian crop capped gains as it continues to sell at a discount to Indian prices, they added. Spot pepper rose by over 7 rupees and ended at 13,966.35 rupees per 100 kg in Kochi, a major trading hub in Kerala. October contract at National Commodity and Derivatives Exchange rose from Rs 13743 to Rs 13777, a gain of 0.23% while November contract rose to RS 13978 from 13920 on Thursday. a gain of 0.34%. In the near term, the market looks set for a correction but the medium term prospects are still bullish.
Chana
India’s Chana futures have showed bullishness last week due to the ongoing festivals and firm prices of kharif pulses which supported chana prices. Improved demand in spot markets especially from North India has helped improve market sentiments. October contract at National Commodity and Derivates Exchange rose to Rs 2,294 while the November contract gained 1.19% at Rs 2,390. In the Delhi spot market, the price rose by 36 rupees to 2,325 rupees per 100 kg. Demand for pulses usually goes up during the country's peak festival season from August to October.Upside gains are being held back due to ample stocks and a likely rise in acreage limited the rise.
The Centre has fixed wheat prices between Rs 1,379.7 and Rs 1,728.23 a quintal for sale from the stocks it is holding in the open market. According to a note sent by the Food Ministry to the Food Corporation of India (FCI), tenders will be floated for sale of wheat between October and December in each State/FCI region and depot-wise bids would be invited. Seven days notice will be given to bidders.
Kerala has become the top producer of cashew nuts in the country thanks to the initiative under the National Horticulture Mission. It presently produces 6,100 tonnes (more than 50 per cent of the national output) with a productivity of 685 kg/ha. And additional area of 1,035 hectares under new planting and rejuvenating cocoa plants in 680 hectares is being undertaken under the National Horticulture Mission scheme.
The BSE, NSE, MCX, forex, bullion and commodities markets are observing a holiday on Monday on account of ‘Bhaubeez’. The Bombay Stock Exchange's main index closed at 17,326.01 points in the Moorat trading session on Saturday. The Nifty closed flat at 5,141.80
Gold
Benchmark December Gold futures at MCX rallied this week to Rs 16048 per 10 gms before settling to a modest figure of Rs 15831 at close of trade on Friday. Higher prevailing prices failed to lift retail market sentiments on ‘Dhanteras’ the biggest gold buying festival in the country. Weaker rupee helped gold climb from a fall towards weekend as weaker rupee makes the dollar-quoted asset expensive.
Rupee witnessed up and down movements on choppy trade on Friday as domestic shares failed to provide a clear direction, while dollar demand from importers and mostly lower Asian units also weighed on sentiment. Profit taking at current levels could bring down MCX gold contract to Rs 15600 levels before stabilizing.
In USA, gold futures ended higher on Friday on strong investment buying and worries about financial sector following quarterly loss posted by Bank of America. At Comex, December gold futures rose 90 cents at$1,051.50 an ounce after recording a high of $1072 on Wednesday. Gold rose to new peaks above $1,070 levels per ounce on Wednesday as the greenback continued to slide against a basket of six currencies, although there were worries that the metal may have become overbought.
Analysts pointed out that gold’s recent rise was fuelled by currency worries rather than inflation. Oil rally towards $78 raises inflation concerns that supports gold, Pull back is likely in gold prices as open interest is staying above 500,000 lots in Comex. Meanwhile, silver is looking for direction from gold with spot silver prices at $17.41.
Gold is likely to show weakness on eroding jewelry demand and might decline to $1025 and toward the psychological $1000 mark.
Base Metals
US copper futures traded lower towards weekend on firmer dollar and fears about increasing supply and fall in near term-demand for base metals. Copper is facing pressure from the extended gains in dollar versus the Euro. COMEX copper warehouse stocks went up 135 short tons on Thursday, bringing total levels to 56,852 short tons.
Stronger rupee weighed on sentiments during mid-week at MCX where its November contract showed weakness. However, eventually weaker rupee did not harm the contract as optimism on the global economy and strong demand from China helped sustain prices at Rs 291 levels.
MCX Copper futures are likely to be range-bound at Rs 287-295 next week and face resistance at Rs 297 levels. The October Zinc contract at MCX ended marginally up at 93.90 while lead for October delivery was also marginally up at Rs 101.65.
Energy
Bullish sentiments prevailed in US crude futures market and on Friday it extended gains for the seventh straight session and closed a the highest level in a year, lifted by a late rally. Other in the oil complex including heating oil futures recorded 11-month highs. On Nymex, November crude settled higher at $78.82. The contract gained 9.42 percent the highest since October 2008. Unexpected steep declines in US gasoline and distillate inventories helped support the oil rally. Rising oil prices also lifted US energy shares even as financial sector was down on Bank of America’s reported quarterly losses. October Futures for crude oil at India’s MCX traded at Rs 3610 on close of session last week.
Soybeans
Soybeans recovered towards weekend tracking gains in global markets but was checked by likely rise in arrivals in the next few weeks. The benchmark December palm oil futures on Bursa Malaysia Derivatives Exchange ended at 2,178 ringgit a tonne, up 3.17 percent.Palm oil and soybean are related commodities and their prices often move in tandem. In US, soybean advanced as dollar fell to 14-month lows and crude oil rose to a high above $78 per barrel.
Increased market arrivals could put pressure on prices in the days ahead. Madhya Pradesh and Maharashtra will witness increased arrivals putting downward pressure on prices. Soybeans October Contract at MCX rose marginally to Rs 2082 while November contract rose to 2092
Pepper
India pepper futures ended slightly higher on Friday buoyed by spot demand but gains were limited by the Brazilian crop, analysts said. Markets remained volatile, absence of selling pressure and the speculative activities helped prices to rise marginally.
Pepper futures market on Wednesday witnessed a sharp fall on bull liquidation due to shortage of time for carrying forward before the maturity of the October contract on the 20th. Add to this there were reports of decline in prices in Vietnam and Indonesia. The domestic demand also failed to pick up as expected.
October contract fell by Rs 315 a quintal on NCDEX to close at Rs 13,690. November and December dropped by Rs 276 and Rs 265 respectively to close at Rs 13,867 and Rs 14,040 a quintal.
Spot markets continue to to be dull and will resume in full swing after Diwali holidays from October 23. The Brazilian crop capped gains as it continues to sell at a discount to Indian prices, they added. Spot pepper rose by over 7 rupees and ended at 13,966.35 rupees per 100 kg in Kochi, a major trading hub in Kerala. October contract at National Commodity and Derivatives Exchange rose from Rs 13743 to Rs 13777, a gain of 0.23% while November contract rose to RS 13978 from 13920 on Thursday. a gain of 0.34%. In the near term, the market looks set for a correction but the medium term prospects are still bullish.
Chana
India’s Chana futures have showed bullishness last week due to the ongoing festivals and firm prices of kharif pulses which supported chana prices. Improved demand in spot markets especially from North India has helped improve market sentiments. October contract at National Commodity and Derivates Exchange rose to Rs 2,294 while the November contract gained 1.19% at Rs 2,390. In the Delhi spot market, the price rose by 36 rupees to 2,325 rupees per 100 kg. Demand for pulses usually goes up during the country's peak festival season from August to October.Upside gains are being held back due to ample stocks and a likely rise in acreage limited the rise.
Wednesday, 7 October 2009
Rising aluminium recycling and climate change
Bauxite makes up 8% of the earth’s crust, it is the third most abundant element in nature. The ore from which aluminum is produced is bauxite. More than 130 million tons of bauxite are mined each year. It has been estimated that we have enough aluminum to last us 400 years.
Bauxite has to be processed into pure aluminum oxide (alumina) before it can be converted to aluminum by electrolysis. Four tons of bauxite are required to produce two tons of alumina which in turn produces one ton of aluminum at the primary smelter.
Smelting is one of the most destructive processes to our climate. Fabrication encompasses several industrial processes: rolling, casting and extrusion.
Aluminum is then formed into products. The major outlets for aluminum products are in transport, building and construction, packaging and engineering. The real impact on the environment, its carbon footprint or greenhouse gas emissions, can only be judged from the life cycle perspective. What we're interested in here is the lifecycle of one aluminum can.
Once our can is used, we certainly hope it is recycled. Recycling is a major consideration in continued aluminum use, representing one of its key attributes. More than half of all the aluminum currently produced originates from recycled raw materials, a trend that is on the rise. In view of energy constraints, we have a huge stake in the collection of available aluminum and developing the most efficient scrap treatments and melting processes.
Aluminum can be recycled over and over again without loss of properties. Aluminum recycling benefits present and future generations by conserving energy and other natural resources.
Recycling just one soda can saves enough electricity to run a laptop computer for over 10 hours.
Recycling saves up to 95% of the energy required for primary aluminum production which avoids greenhouse gas emissions used in the process. Increasing demand for aluminum and the long lifetime of many products mean that, for the foreseeable future, the overall amount of primary metal produced from bauxite will continue to be greater than the volume of available recycled metal.
The life cycle of an aluminum can from mining to recycling is 60 days. Think of how many beverage and food cans you use during the next 60 days.
Global aluminum recycling rates are high, approximately 90% for transport and construction applications and about 60% for cans. In 2004, the United States only recycled 45% of cans.
I think we can do better than 45%, after all, it's something we all can do. (Courtesy: PRLog)
Bauxite has to be processed into pure aluminum oxide (alumina) before it can be converted to aluminum by electrolysis. Four tons of bauxite are required to produce two tons of alumina which in turn produces one ton of aluminum at the primary smelter.
Smelting is one of the most destructive processes to our climate. Fabrication encompasses several industrial processes: rolling, casting and extrusion.
Aluminum is then formed into products. The major outlets for aluminum products are in transport, building and construction, packaging and engineering. The real impact on the environment, its carbon footprint or greenhouse gas emissions, can only be judged from the life cycle perspective. What we're interested in here is the lifecycle of one aluminum can.
Once our can is used, we certainly hope it is recycled. Recycling is a major consideration in continued aluminum use, representing one of its key attributes. More than half of all the aluminum currently produced originates from recycled raw materials, a trend that is on the rise. In view of energy constraints, we have a huge stake in the collection of available aluminum and developing the most efficient scrap treatments and melting processes.
Aluminum can be recycled over and over again without loss of properties. Aluminum recycling benefits present and future generations by conserving energy and other natural resources.
Recycling just one soda can saves enough electricity to run a laptop computer for over 10 hours.
Recycling saves up to 95% of the energy required for primary aluminum production which avoids greenhouse gas emissions used in the process. Increasing demand for aluminum and the long lifetime of many products mean that, for the foreseeable future, the overall amount of primary metal produced from bauxite will continue to be greater than the volume of available recycled metal.
The life cycle of an aluminum can from mining to recycling is 60 days. Think of how many beverage and food cans you use during the next 60 days.
Global aluminum recycling rates are high, approximately 90% for transport and construction applications and about 60% for cans. In 2004, the United States only recycled 45% of cans.
I think we can do better than 45%, after all, it's something we all can do. (Courtesy: PRLog)
The health benefits of wearing silver jewelry!
Silver Jewelry is very nice-looking, but also it’s a very healthy jewelry. Do you know much about how much silver is needed to our bodies? It’s a highly important element for balancing other elements in our body. It keeps our blood vessels elastic. It is really important for bone formation and healing, skin formation and repair.
Silver Jewelry is very good to wear with autumn-colored clothes. Yellow, beige colors signs of soon to come winter, which always brings spring after it. Try also wearing silver beads with black t-shirt or any other dark top.
Since the dawn of civilization people used silver because of its unusual strengths. Wise people engraved prayers on silver stones or silver plates to deliver a strong message to other worlds. Is it believed that silver stimulates energy flow to itself, so when silver jewellry is on body – it helps to accumulate more energy. It also seemed to help with avoiding lethargic tendencies and as a result of wearing it you may feel re-vitalized and stronger. It helps you to concentrate your thoughts.
As you might have already read – silver is absorbed through skin and has pain-relief effect, that’s why silver bracelets are so popular. It’s not an urban legend – this has medical background and some proofs from Eastern countries, where people know many things from past. Knowledge slowly fades away in nowadays if it has no big commercial value, but Eastern countries cherish comprehensive historical facts. So in a talk with a lady from East – there was a confirmation that silver jewellery has strong effect on people suffering from arthritis. Silver (especially magnetic jewelry) is known to increase blood circulation and reduce pain in muscles. Many people suffering from arthritis will not leave home without a bracelet.
Besides silver bracelets you can find some silver beads, strings, and earrings. Most of them are amazingly beautiful and not expensive, since silver isn’t a precious metal. Despite it’s dollar value – it’s very precious to our health.
Wearing silver jewelery you might notice green stains on your skin under the place of contact with silver. Don’t panic. It’s all right, it will come off in a day or two – it’s just silver entering your body. It usually happens in warm days. If you want to avoid it – paint inside a bracelet with a transparent nail polish, but as you might figure out – it prevents health benefits of silver too. These stains aren’t known to do any harm for you. There are recommendations to wear silver jewelry while you are sleeping, which time for our body to rest and to restore, that way you can wash it’s traces in morning.
Silver jewelry, like many other metals is known to tarnish over time. To clean jewelery, made from silver – just put it in a small solution of lemon or limejuice with a dash of salt, it will shine as new. Alternately you can keep it in silver jewelry box, preventing from continual air exposure, which causes silver jewelry to tarnish.
If you are still not convinced that silver bracelets are a great way to help your health – well – go to the nearest pharmacy and continue to buy pilling helping pharmaceutical industry to grow and sell you even more.
After all – it’s not always about how it works – sometimes it’s about how it looks – and 925 silver jewelry is sometimes amazingly beautiful. Try to find some and you’ll be amazed too!
(Courtesy:PRLog)
Silver Jewelry is very good to wear with autumn-colored clothes. Yellow, beige colors signs of soon to come winter, which always brings spring after it. Try also wearing silver beads with black t-shirt or any other dark top.
Since the dawn of civilization people used silver because of its unusual strengths. Wise people engraved prayers on silver stones or silver plates to deliver a strong message to other worlds. Is it believed that silver stimulates energy flow to itself, so when silver jewellry is on body – it helps to accumulate more energy. It also seemed to help with avoiding lethargic tendencies and as a result of wearing it you may feel re-vitalized and stronger. It helps you to concentrate your thoughts.
As you might have already read – silver is absorbed through skin and has pain-relief effect, that’s why silver bracelets are so popular. It’s not an urban legend – this has medical background and some proofs from Eastern countries, where people know many things from past. Knowledge slowly fades away in nowadays if it has no big commercial value, but Eastern countries cherish comprehensive historical facts. So in a talk with a lady from East – there was a confirmation that silver jewellery has strong effect on people suffering from arthritis. Silver (especially magnetic jewelry) is known to increase blood circulation and reduce pain in muscles. Many people suffering from arthritis will not leave home without a bracelet.
Besides silver bracelets you can find some silver beads, strings, and earrings. Most of them are amazingly beautiful and not expensive, since silver isn’t a precious metal. Despite it’s dollar value – it’s very precious to our health.
Wearing silver jewelery you might notice green stains on your skin under the place of contact with silver. Don’t panic. It’s all right, it will come off in a day or two – it’s just silver entering your body. It usually happens in warm days. If you want to avoid it – paint inside a bracelet with a transparent nail polish, but as you might figure out – it prevents health benefits of silver too. These stains aren’t known to do any harm for you. There are recommendations to wear silver jewelry while you are sleeping, which time for our body to rest and to restore, that way you can wash it’s traces in morning.
Silver jewelry, like many other metals is known to tarnish over time. To clean jewelery, made from silver – just put it in a small solution of lemon or limejuice with a dash of salt, it will shine as new. Alternately you can keep it in silver jewelry box, preventing from continual air exposure, which causes silver jewelry to tarnish.
If you are still not convinced that silver bracelets are a great way to help your health – well – go to the nearest pharmacy and continue to buy pilling helping pharmaceutical industry to grow and sell you even more.
After all – it’s not always about how it works – sometimes it’s about how it looks – and 925 silver jewelry is sometimes amazingly beautiful. Try to find some and you’ll be amazed too!
(Courtesy:PRLog)
Tuesday, 6 October 2009
Commodity Trends: Gold holds steady, metals fall
India’s growth rate is expected to clock 6.4 to 7% in 2009-10 as most Asian economies are expected to rebound from the financial crisis which is positive for both equity and commodity markets. Commodity exchanges in the country have already witnessed their combined turnover rise by 32.92 per cent till September 15 this fiscal over the same period last year, even as bullion trade dipped marginally, the commodity market regulator Forward Markets Commission (FMC) said.
BSE Sensex has climbed above !7000 levels for the first time since May 2008 on hopes of better quarterly earnings, banking, infrastructure stocks.
Poor demand in consuming countries have led to 20% fall in India’s coffee exports while global sugar prices are rising on Nagging worries over the impact on sugar supplies from top producer Brazil due to persistent and excessive rain, combined with expectations of further demand by Mexico, the US and India, have fuelled bullish sentiments in sugar.
According to data released by the Coffee Board, for the crop year ending September 30, 2009, India’s coffee exports stood at 1,81,069 tonnes as against 2,27,779 tonnes in the previous year, a decline of 20.5 per cent.
Export earnings were Rs 1,978 crore for the year, down over 17 per cent compared with the previous year. Unit value remained flat at around Rs 1 lakh per tonne.
Precious Metals
After initial weakness followed by marginal gains gold bounced backed to regain $1000 on Wednesday and managed to stay close to the $1000 mark as dollar retreated over news of deeper than expected US job losses in September. In the global market, gold rose above $1000 on Friday while in India prices dropped by Rs 50 per 10 gms at Rs 15,590. Earlier in the week, crude oil rally and geopolitical tensions supported dollar’s upward moves.
Gold prices are in for weakness as lower oil prices curbs demand for safe haven investments. Easing inflationary pressures does not augur well for gold. December Gold futures rose $3.60 at $1004 an ounce in the comex division of New York Mercantile Exchange. In the near to medium term, inflationary pressures and trends in dollar are major factors affecting bullion prices. The gold-to-oil ratio hs risen to 14.40 towards weekend from 14.17 previously. Spot Gold had risen to $ 1006 per ounce on intra-day trading on Tuesday.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, said its holdings stood at 1,095.327 tonnes as of Oct. 1. As of Sept. 30, it was up 1.22 tonnes from the previous business day. MCX December gold had strong support at 15452 and ended with a profit of RS 63 at Rs 15598. However, the trend looks downward while global prices are likely to hover close above $1000 mark next week.
Base Metals
Base metals face downside pressure on the back of bad economic news coupled with Chinese holiday. Copper prices ended the week on a negative note, losing almost 2% the last week. Poor US unemployment figures coupled with a long holiday in China kept the world’s largest copper consumer away. US non-farm payrolls revealed a loss of 263,000 jobs in September, while the market had braced itself for a lesser decline of 179,000 jobs.
The unemployment rate, however, met expectations at 9.8 percent. US carmakers watched sales drop 23.3 percent year-on-year to 721,378 vehicles in September, leaving the market reeling after the cash for clunkers incentives program ended in August. Though we have witnessed a downside in copper prices due to absence of China we feel that prices could rise by the end of next week as investment funds could buy ahead of return of the Chinese players in the market. Trading in the Shanghai markets will commence on 9th October, which is a Friday. Factor that could prevent a sharp upside by the end of next week in base metals could be a stronger dollar which has now found some strength on the back of poor US economic data.
Economic data from the US has raised concern that the situation still remains bleak. Overall, the employment scenario is still disturbing and the rally in base metal prices ahead of actual economic improvement may be threatening from the short-term perspective. We hold the view that, the slight improvement that is being witnessed in the economic data across the globe is mainly linked to the stimulus and other financial measures. If economies were left aside without stimulus measures, we could not have witnessed this change in economic figures. Hence, the rally in base metals remains under threat of a correction as demand needs to show strong improvement. Prices have raced ahead of their fundamentals; hence profit-booking at higher levels cannot be ignored. In the coming week, copper prices are expected to find support at 281.35/276.85 and face resistance at 294.50/303.15.
Energy
Crude oil prices gained a whopping 6% in the last week despite inventory data showing a rise. Crude oil supplies gained 2.8 million barrels to 338.4 million. Distillate stockpiles, which include heating oil and diesel, rose 323,000 barrels to 171.1 million. That’s a sixth weekly increase even as refinery output and imports dropped. Gasoline inventories fell 1.7 million barrels to 211.5 million in the week to Sept. 25. Oil prices received support on the back of weakness in the US Dollar Index in the early part of the week. However, the dollar index strengthened by the end of the week as bad economic data from the US lowered demand for higher-yielding and riskier investment assets and raised demand for the low-yielding dollar.
Oil prices touched a high of $71.39/bbl last week but closed below the $70/bbl mark as the dollar showed strength on Thursday and Friday. The decline in oil prices on Friday was after an economic report that showed that the US jobless rate increased to a 26-year high in September, boosting concern that fuel demand will take time to rebound. Economic concerns still persist and prices could face resistance around $70/bbl levels as demand scenario is not expected to improve significantly. In the coming week too, we could witness a rise in oil inventories and that could add pressure on oil prices. If the dollar strengthens on the back of rise in demand for low-yielding currencies then that will also add pressure on the downside. In the coming week, we expect oil prices to find support at 3212/3080 and face resistance at 3445/3540 levels.
Soybean
Soybean (NCDEX November contract) futures moved in a range of 2005-2051.50 levels during the last week. Soybean prices fell slightly lower on account of harvesting pressure of new crop in Maharashtra and Madhya Pradesh during the last week. Lower export demand of domestic soy meal and globally soybean production is estimated higher as compared to last year provided support to bears in the market. However, it recovered slightly on lower sowing acreage this year as compared to last year by Ministry of Agriculture and lower production estimates to 97 lakh tonnes this year from 108 lakh tonnes last year as per the Soybean Processors Association of India (SOPA). Domestic kharif oilseeds area so far been covered on 172.21 lakh hectares against 181.34 lakh hectares during corresponding period a year ago, as on September 24, 2009.The area under soybean is reported down at 95.90 lakh hectares against 96.24 lakh hectares a year ago, groundnut at 44.22 lakh hectares vs 51.95 lakh hectares in the corresponding period last year. In the coming week, prices are expected to trade lower on account of harvesting pressure in major producing states like Maharashtra and Madhya Pradesh. Prices have strong support at 1945/1910 and resistance is seen at 2060/2115 levels.
Chana
Chana prices witnessed a bearish trend in the last one month due to tremendous pressure from the government to curb the rising prices. Also, huge stocks of Chana supported the bearish market sentiments. Futures prices of Chana which surged 2.5% during the initial days of the last week on improved demand ahead of festival season erased the early gains and settled lower during the weekend due to adequate supplies in the markets. During the last week, October Chana contract traded in the range of Rs.2281-2353 per qtl.
Chana production stood at around 7.05 MMT up from the 2007-08 final estimates of 5.75 MMT. Also, it is expected that the acreage under Chana in the coming Rabi season will be more due to higher moisture level. Thus, overall sentiments in Chana remain bearish in the medium to long term. However in the short term, Chana prices will remain firm due to good demand ahead of festival season. Also, higher prices of other Pulses would support the sentiments in the short term. NCDEX Chana November contract is having strong support at 2335/2300 per qtl and resistance is seen at Rs. 2415/2455 per qt.
Black Pepper
Black pepper market was very volatile in the beginning of the week as bear operators were at centre-stage aided by higher crop arrivals from Brazil and Indonesia. On Tuesday October contract declined by Rs 48 on NCDEX to close at Rs 13,995 a quintal. November and December dropped by Rs 50 and Rs 14 respectively to close at Rs 14,160 and Rs 14,301 a quintal.
Pepper futures market on Thursday went up in the forenoon on bullish reports based on the earthquake in Indonesia and buy calls from expert analysts.
It dropped in the afternoon on sell calls to close below Wednesday’s closing. Profit booking at the end of the day also led to fall in prices although firm trend was visible due to robust spot demand, low stocks and reviving exports. India’s pepper is quite competitive as its ASTA Grade at $3000-3050 is cheaper than Vietnamese offering. Spot pepper rose by nearly 5 rupees and ended at 14,193.75 rupees per 100 kg in Kochi, a major trading hub in Kerala.
Fundamentals remain bullish on reviving exports, low stocks and robust spot demand. Decreasing price gap with leading global producers of the spice has led to export interest trickling back to India. Demand for spices usually goes up during August to October, the country's peak festival season.
Rubber
Weak to steady trend was visible in rubber spot markets in the country and this was also reflected in domestic futures at NMCE as the traders look for definite direction before making trades. RSS 4 grade was quoted at Rs 107.50 on extremely dull volumes. Tyre sector demand also looks dull, traders said. The October futures for RSS 4 closed at Rs 108.15 (108.21), November at Rs 109.09 (109.02), December at Rs 110.70 (110.96) and January at Rs 112.50 (112.19) a kg on National Multi Commodity Exchange (NMCE).
Rubber declined as global equity markets dropped and U.S. auto sales slumped in September, eroding optimism that demand may grow for the commodity used in tires and gloves.
At TOCOM, rubber futures turned weak tracking Japanese equity market on unexpected drop in US manufacturing data, increasing jobless claims and declining September auto sales. Martch delivery rubber lost 3.8 yen at 198.6 yen a kg before closing at 200.8 yen although initially the contract had gain as much 2.7% in the week. Fundamentals for rubber continued to be steady to weak as data on automobile sales and economic recovery is not yet positive.
Wheat
Weakness was visible in India wheat futures on hopes of higher output. Agriculture Minister Sharad Pawar recently said that the extended monsoon season augors well for winter-sown crops such as wheat as soil moisture is set to improve.The winter sowing season starts next month. The October futures contract NWTV9 on National Commodity and Derivatives Exchange fell to 1,222.6 rupees per 100 kg on Thursday.On Sept. 1, India had 30.1 million tonnes of wheat stocks, up from 23.2 million tonnes a year earlier. At the beginning of the new marketing year in April 2010, stocks are estimated at 10 million tonnes.
This week, CBOT wheat has rebounded an reports that US farmers are likely to go slow on sowing due to falling prices. CBOT Wheat has dropped 25% this year due to abundant supplies and falling export demand from USA. However, towards weekend, the bounce could not be retained and fell to $4.39 a bushel on large world supplies and spillover pressure form other markets. Canada has also raised it s wheat production dampening market sentiments.
BSE Sensex has climbed above !7000 levels for the first time since May 2008 on hopes of better quarterly earnings, banking, infrastructure stocks.
Poor demand in consuming countries have led to 20% fall in India’s coffee exports while global sugar prices are rising on Nagging worries over the impact on sugar supplies from top producer Brazil due to persistent and excessive rain, combined with expectations of further demand by Mexico, the US and India, have fuelled bullish sentiments in sugar.
According to data released by the Coffee Board, for the crop year ending September 30, 2009, India’s coffee exports stood at 1,81,069 tonnes as against 2,27,779 tonnes in the previous year, a decline of 20.5 per cent.
Export earnings were Rs 1,978 crore for the year, down over 17 per cent compared with the previous year. Unit value remained flat at around Rs 1 lakh per tonne.
Precious Metals
After initial weakness followed by marginal gains gold bounced backed to regain $1000 on Wednesday and managed to stay close to the $1000 mark as dollar retreated over news of deeper than expected US job losses in September. In the global market, gold rose above $1000 on Friday while in India prices dropped by Rs 50 per 10 gms at Rs 15,590. Earlier in the week, crude oil rally and geopolitical tensions supported dollar’s upward moves.
Gold prices are in for weakness as lower oil prices curbs demand for safe haven investments. Easing inflationary pressures does not augur well for gold. December Gold futures rose $3.60 at $1004 an ounce in the comex division of New York Mercantile Exchange. In the near to medium term, inflationary pressures and trends in dollar are major factors affecting bullion prices. The gold-to-oil ratio hs risen to 14.40 towards weekend from 14.17 previously. Spot Gold had risen to $ 1006 per ounce on intra-day trading on Tuesday.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, said its holdings stood at 1,095.327 tonnes as of Oct. 1. As of Sept. 30, it was up 1.22 tonnes from the previous business day. MCX December gold had strong support at 15452 and ended with a profit of RS 63 at Rs 15598. However, the trend looks downward while global prices are likely to hover close above $1000 mark next week.
Base Metals
Base metals face downside pressure on the back of bad economic news coupled with Chinese holiday. Copper prices ended the week on a negative note, losing almost 2% the last week. Poor US unemployment figures coupled with a long holiday in China kept the world’s largest copper consumer away. US non-farm payrolls revealed a loss of 263,000 jobs in September, while the market had braced itself for a lesser decline of 179,000 jobs.
The unemployment rate, however, met expectations at 9.8 percent. US carmakers watched sales drop 23.3 percent year-on-year to 721,378 vehicles in September, leaving the market reeling after the cash for clunkers incentives program ended in August. Though we have witnessed a downside in copper prices due to absence of China we feel that prices could rise by the end of next week as investment funds could buy ahead of return of the Chinese players in the market. Trading in the Shanghai markets will commence on 9th October, which is a Friday. Factor that could prevent a sharp upside by the end of next week in base metals could be a stronger dollar which has now found some strength on the back of poor US economic data.
Economic data from the US has raised concern that the situation still remains bleak. Overall, the employment scenario is still disturbing and the rally in base metal prices ahead of actual economic improvement may be threatening from the short-term perspective. We hold the view that, the slight improvement that is being witnessed in the economic data across the globe is mainly linked to the stimulus and other financial measures. If economies were left aside without stimulus measures, we could not have witnessed this change in economic figures. Hence, the rally in base metals remains under threat of a correction as demand needs to show strong improvement. Prices have raced ahead of their fundamentals; hence profit-booking at higher levels cannot be ignored. In the coming week, copper prices are expected to find support at 281.35/276.85 and face resistance at 294.50/303.15.
Energy
Crude oil prices gained a whopping 6% in the last week despite inventory data showing a rise. Crude oil supplies gained 2.8 million barrels to 338.4 million. Distillate stockpiles, which include heating oil and diesel, rose 323,000 barrels to 171.1 million. That’s a sixth weekly increase even as refinery output and imports dropped. Gasoline inventories fell 1.7 million barrels to 211.5 million in the week to Sept. 25. Oil prices received support on the back of weakness in the US Dollar Index in the early part of the week. However, the dollar index strengthened by the end of the week as bad economic data from the US lowered demand for higher-yielding and riskier investment assets and raised demand for the low-yielding dollar.
Oil prices touched a high of $71.39/bbl last week but closed below the $70/bbl mark as the dollar showed strength on Thursday and Friday. The decline in oil prices on Friday was after an economic report that showed that the US jobless rate increased to a 26-year high in September, boosting concern that fuel demand will take time to rebound. Economic concerns still persist and prices could face resistance around $70/bbl levels as demand scenario is not expected to improve significantly. In the coming week too, we could witness a rise in oil inventories and that could add pressure on oil prices. If the dollar strengthens on the back of rise in demand for low-yielding currencies then that will also add pressure on the downside. In the coming week, we expect oil prices to find support at 3212/3080 and face resistance at 3445/3540 levels.
Soybean
Soybean (NCDEX November contract) futures moved in a range of 2005-2051.50 levels during the last week. Soybean prices fell slightly lower on account of harvesting pressure of new crop in Maharashtra and Madhya Pradesh during the last week. Lower export demand of domestic soy meal and globally soybean production is estimated higher as compared to last year provided support to bears in the market. However, it recovered slightly on lower sowing acreage this year as compared to last year by Ministry of Agriculture and lower production estimates to 97 lakh tonnes this year from 108 lakh tonnes last year as per the Soybean Processors Association of India (SOPA). Domestic kharif oilseeds area so far been covered on 172.21 lakh hectares against 181.34 lakh hectares during corresponding period a year ago, as on September 24, 2009.The area under soybean is reported down at 95.90 lakh hectares against 96.24 lakh hectares a year ago, groundnut at 44.22 lakh hectares vs 51.95 lakh hectares in the corresponding period last year. In the coming week, prices are expected to trade lower on account of harvesting pressure in major producing states like Maharashtra and Madhya Pradesh. Prices have strong support at 1945/1910 and resistance is seen at 2060/2115 levels.
Chana
Chana prices witnessed a bearish trend in the last one month due to tremendous pressure from the government to curb the rising prices. Also, huge stocks of Chana supported the bearish market sentiments. Futures prices of Chana which surged 2.5% during the initial days of the last week on improved demand ahead of festival season erased the early gains and settled lower during the weekend due to adequate supplies in the markets. During the last week, October Chana contract traded in the range of Rs.2281-2353 per qtl.
Chana production stood at around 7.05 MMT up from the 2007-08 final estimates of 5.75 MMT. Also, it is expected that the acreage under Chana in the coming Rabi season will be more due to higher moisture level. Thus, overall sentiments in Chana remain bearish in the medium to long term. However in the short term, Chana prices will remain firm due to good demand ahead of festival season. Also, higher prices of other Pulses would support the sentiments in the short term. NCDEX Chana November contract is having strong support at 2335/2300 per qtl and resistance is seen at Rs. 2415/2455 per qt.
Black Pepper
Black pepper market was very volatile in the beginning of the week as bear operators were at centre-stage aided by higher crop arrivals from Brazil and Indonesia. On Tuesday October contract declined by Rs 48 on NCDEX to close at Rs 13,995 a quintal. November and December dropped by Rs 50 and Rs 14 respectively to close at Rs 14,160 and Rs 14,301 a quintal.
Pepper futures market on Thursday went up in the forenoon on bullish reports based on the earthquake in Indonesia and buy calls from expert analysts.
It dropped in the afternoon on sell calls to close below Wednesday’s closing. Profit booking at the end of the day also led to fall in prices although firm trend was visible due to robust spot demand, low stocks and reviving exports. India’s pepper is quite competitive as its ASTA Grade at $3000-3050 is cheaper than Vietnamese offering. Spot pepper rose by nearly 5 rupees and ended at 14,193.75 rupees per 100 kg in Kochi, a major trading hub in Kerala.
Fundamentals remain bullish on reviving exports, low stocks and robust spot demand. Decreasing price gap with leading global producers of the spice has led to export interest trickling back to India. Demand for spices usually goes up during August to October, the country's peak festival season.
Rubber
Weak to steady trend was visible in rubber spot markets in the country and this was also reflected in domestic futures at NMCE as the traders look for definite direction before making trades. RSS 4 grade was quoted at Rs 107.50 on extremely dull volumes. Tyre sector demand also looks dull, traders said. The October futures for RSS 4 closed at Rs 108.15 (108.21), November at Rs 109.09 (109.02), December at Rs 110.70 (110.96) and January at Rs 112.50 (112.19) a kg on National Multi Commodity Exchange (NMCE).
Rubber declined as global equity markets dropped and U.S. auto sales slumped in September, eroding optimism that demand may grow for the commodity used in tires and gloves.
At TOCOM, rubber futures turned weak tracking Japanese equity market on unexpected drop in US manufacturing data, increasing jobless claims and declining September auto sales. Martch delivery rubber lost 3.8 yen at 198.6 yen a kg before closing at 200.8 yen although initially the contract had gain as much 2.7% in the week. Fundamentals for rubber continued to be steady to weak as data on automobile sales and economic recovery is not yet positive.
Wheat
Weakness was visible in India wheat futures on hopes of higher output. Agriculture Minister Sharad Pawar recently said that the extended monsoon season augors well for winter-sown crops such as wheat as soil moisture is set to improve.The winter sowing season starts next month. The October futures contract NWTV9 on National Commodity and Derivatives Exchange fell to 1,222.6 rupees per 100 kg on Thursday.On Sept. 1, India had 30.1 million tonnes of wheat stocks, up from 23.2 million tonnes a year earlier. At the beginning of the new marketing year in April 2010, stocks are estimated at 10 million tonnes.
This week, CBOT wheat has rebounded an reports that US farmers are likely to go slow on sowing due to falling prices. CBOT Wheat has dropped 25% this year due to abundant supplies and falling export demand from USA. However, towards weekend, the bounce could not be retained and fell to $4.39 a bushel on large world supplies and spillover pressure form other markets. Canada has also raised it s wheat production dampening market sentiments.
The importance of strategies for ETF investors
When it comes to investing, you have many options when it comes to exchange traded funds (ETFs), stocks, bonds, futures or options, but one thing is certain: a sound strategy is more important than anything else.
During the worst financial crisis in the past 70 years, you may have watched your nest egg dwindle to half of what it was – or even more. Now that financial stability is slowly starting to emerge and millions are trying to pick up the pieces, it’s important to keep in mind that the best financial advice is completely worthless if it is not followed, states Greg Salsbury of Investment News.
Were you one of the ones who lost their cool when the markets were at their worst? If so, read on for some tips about how to do better the next time the markets go topsy-turvy:
You now know this: do not allow emotions to drive investment decisions. Often, people think that their gut feelings will enable them to cash in on the next Google . Fear makes them sell too quickly. Exuberance makes them buy without fully examining the pros and cons.
It is important to stay diversified. This allows investors to reap the rewards of gaining exposure to high performing sectors and industries while not banking on the performance of one or two stocks. A good portfolio has exposure to bonds, domestic equities and foreign equities. ETFs enable investors to gain broad exposure to a growing number of asset classes and sectors.
The third artery to building a good retirement portfolio is education. It is vital to know what your portfolio holds, economic conditions, both macro and micro, which could potentially hinder your holdings, and know what your choices are. After all, you control the destiny of your portfolio.
Have an exit strategy. Don’t hang on, hoping against hope that a position will come back. Instead, a stop loss will help stop the bleeding when a trend winds to a stop. Investors who had a stop loss that had them out between October and March were able to sit out a good chunk of the market’s downturn.
Have an entry strategy, too. There are many out there, including a trend following strategy, which uses the 200-day moving average as a guide. It is easy to use and enables investors to tuck their emotions away. The key to employing a strategy is to use it. Don’t rationalize your way out of it when the signals say you should act.
For a better understanding of the trend following strategy, take a look at our new book on trend following. There’s $4 trillion on the sidelines, but the average investor doesn’t believe we’re in a recovery at this point. Investors don’t typically buy until there’s a full recovery, but if you waited until that point, you would miss a sizable portion of potential gains.
During the worst financial crisis in the past 70 years, you may have watched your nest egg dwindle to half of what it was – or even more. Now that financial stability is slowly starting to emerge and millions are trying to pick up the pieces, it’s important to keep in mind that the best financial advice is completely worthless if it is not followed, states Greg Salsbury of Investment News.
Were you one of the ones who lost their cool when the markets were at their worst? If so, read on for some tips about how to do better the next time the markets go topsy-turvy:
You now know this: do not allow emotions to drive investment decisions. Often, people think that their gut feelings will enable them to cash in on the next Google . Fear makes them sell too quickly. Exuberance makes them buy without fully examining the pros and cons.
It is important to stay diversified. This allows investors to reap the rewards of gaining exposure to high performing sectors and industries while not banking on the performance of one or two stocks. A good portfolio has exposure to bonds, domestic equities and foreign equities. ETFs enable investors to gain broad exposure to a growing number of asset classes and sectors.
The third artery to building a good retirement portfolio is education. It is vital to know what your portfolio holds, economic conditions, both macro and micro, which could potentially hinder your holdings, and know what your choices are. After all, you control the destiny of your portfolio.
Have an exit strategy. Don’t hang on, hoping against hope that a position will come back. Instead, a stop loss will help stop the bleeding when a trend winds to a stop. Investors who had a stop loss that had them out between October and March were able to sit out a good chunk of the market’s downturn.
Have an entry strategy, too. There are many out there, including a trend following strategy, which uses the 200-day moving average as a guide. It is easy to use and enables investors to tuck their emotions away. The key to employing a strategy is to use it. Don’t rationalize your way out of it when the signals say you should act.
For a better understanding of the trend following strategy, take a look at our new book on trend following. There’s $4 trillion on the sidelines, but the average investor doesn’t believe we’re in a recovery at this point. Investors don’t typically buy until there’s a full recovery, but if you waited until that point, you would miss a sizable portion of potential gains.
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