The onset of the festive season marked by high commodity prices has been a dampener for the most of the Indian households. While prices of agri commodities are expected to look up during the period, bullion commodity might see some downward corrections in pricing, said analysts.
The yellow metal tends to regain its lost ground as prices tend to correct slightly downwards. ?During the festival season and last quarter of this year, India?s gold demand and import will definitely increase but any rise in prices will directly affect the demand. Without demand, its difficult for prices to sustain at higher levels. So during the next few days, no major dip is expected in prices. But, if prices continue to rule higher, demand will be effected resulting in lower import for 2009,? said Vibhu Ratandhara of Bonanza Commodity Brokers.
As per the WGC data, during the April-August period, India imported 265 tonne of gold compared to more than 700 tonne in the previous year. India imported almost 21.8 tonne of gold in August 2009 against 7.8 tonne in July 2009. If prices fall towards Rs 14,000-14,500 per 10 gm level, import and demand are expected to rise.
?Traditional demand drivers will remain as only support for gold prices picking up whenever they start to fall and consolidate. Investment demand will dictate the seasons now with traditional demand taking a back seat. And this will last, for as long as the global financial system remains faltering and unable to carry through its tasks reliably,? said Kuljeet Kataria of Motilal Oswal Commodities.
Buying and stocking of agri-commodities during the festive season take place at the beginning of August and last till November. ?Monsoon during the end of would support the winter crops and good yield is expected. Good yield is also expected due to early sowing of these commodities and good rains. Even sowing area is not seen to be decreasing for these two,? said Ratandhara.
Carryover stock for turmeric and chana is on the lower side. Relief in their prices is expected to be seen by the year end. Jeera will be looking up throughout the season. Indian jeera has a huge export demand. Jeera traded sideways in the last three sessions in the range of Rs 11,133-11,469 at the NCDEX October futures amidst low volumes traded.
