Gold price surges above $640

Updated: Nov 28 2006, 05:30am hrs
Markets opened with a bang but failed sustaining and retreated to Fridays closing levels. Gold during the Asian trading session moved up to $642.15 and later moved down to $637.2 while the US dollar witnessed short-covering with no important economic data released across.

However, Euro continued to trade above 1.31 against dollar. Gold at the benchmark contract in MCX was up at Rs 928 a gm and later was down to Rs 923 a gram, silver followed suit after moving up to Rs 19.94 a gram.

Crude oil initially was up to near term resistance of $60.2 after Saudi Arabias oil minister said his country would support a second cut in OPECs output this year to support the price.

On a recent forecast by Weather Derivatives the heating demand was reduced to 44% below normal till December 1 thus keeping price range bound. Conflicting news kept the movements choppy through the day.

Zinc surged above the recent high after prices by the leading zinc manufacturer in India decide to raise the price of zinc to Rs 128 a kg with immediate effect. The price failed sustaining the high on Monday after the warehouse inventories for zinc was up by 100 tonne. Meanwhile copper warehouse stocks fell by 3000 toone thus providing support from further fall. Zinc was trading at Rs 205 a kg and copper at Rs 317 a kg.

MARKET WATCH

Rubber was the biggest grosser of the day. The active January contract (NMCE) hit the upper circuit and closed at Rs 7919 chiefly due to speculative buying taking clues from positive international rubber futures and consequent short-covering.

Pulses traded weak. Urad desi January contract declined by Rs 1.61 and closed at Rs 3,367 due to lack of physical buying support from the traders and millers. Chana January contract was down by 1.59% to Rs 2,855 on the news of import arrivals of Australian chana.

Tur January contract eased down by Rs 37 and closed at Rs 1,954 on lack of demand from the spot market. Guar seed January contract marginally gained by 1.12% to Rs 2,176 on the lack of arrivals and good demand from the traders.