After a sharp fall last week, bullions got some relief from bears, thanks to weak dollar and bargain hunters. Carrying on the weakness prices opened on a weak note and was trading in a tight range in the earlier part this week.
Later weak US dollar, short covering and renewed buying at lower levels helped the prices to end the week in green. In MCX prices for August futures was trading around Rs.9600 per 10gms from Rs.9200 last week.
Economic growth in the United States slowed abruptly during the second quarter to a 2.5 per cent annualized rate in the April-June quarter. That was less than half the robust 5.6 per cent rate registered in the first quarter. Meanwhile, Festive demand from India is on the doorsteps and prices are likely to gain further provided this up trend in international markets continues. Supply constrains continued to keep copper prices firm this week. Copper rose on Friday, hitting a six-day high on expectations that union workers at the world's largest copper mine would vote to strike. Union workers at Chile's Escondido copper mine began voting and were expected to decide to strike. Crude prices remained volatile on mixed inflow of fundamental news. Prices remained above $75 in the earlier part of the week on supply concerns from Nigeria.
At least 696,000 barrels per day of Nigerian crude oil output; a quarter of the roughly 3 million bpd capacity of Africa's biggest producer is shut after militant attacks and pipeline leaks this year.
However on Friday prices slipped below $73 on profit taking and erased most of its gains that it made this week. The energy market was also hit by a report showing weaker-than-expected economic growth in the United States during the second quarter, raising expectations that the world's biggest oil consumer may slow its energy demand.
Plantations & spices
Pepper, Jeera (Cumin seed) and Rubber continue to add vibrancy to agri futures trading. Pepper gained sharply by 1549 rupees from 8690 on tight supply in the international markets and up trend in global White pepper prices.
The raising of quotes by Indonesia and Brazil lead to spurt of speculative buying in domestic markets amid sellers in spot adopting a wait and watch strategy and not offering their produce.
Nevertheless such bull run is bound to undergo a technical correction and looks fragile without much strength. Jeera futures similarly flared up by more than 600 rupees from 7311 on reduced arrivals, disruption of supplies from Iran and Syria due to geo-political tensions and increased export enquiries from Singapore and China. Chilli futures traded range bound with low volumes on reduced export off takes on lower comparative international prices.
The rubber futures witnessed recovery-taking cues from international markets on the possibility of increased demand from China and rains reducing supply from Thailand in the coming days. The spot prices too recovered on improved buying by tyre companies.
Pulses & others
Chana futures that were initially trading down on the possibility of implementing Essential Commodity Act by state governments to curb hoarding, ended the week on a firm note on the talk of exports in chana flour and the government deferring its decision to import pulses as the prices offered by bidders were not competitive.
However Urad continues to plummet as the import cargo from Myanmar is expected to reach India at the start of next month. The bullishness in global edible oil prices on the possibility of diverting stocks to manufacture bio diesel lifted the domestic refined soy oil futures.
The impending festival demand and increase in import duties also aided soy oil futures to trade in positive zone.
Courtesy: Geojit Commodities Ltd