Gold futures posted a modest gain on Friday to mark their return after being dumped last week. The gold futures rose for the fourth consecutive day and managed to close out higher and that after achieving a life time high of 6,939 midway through Thursday but prices closed off the days high and managed to hold on to it the next two days.
Gold went up as the dollar came in for some severe pressure on the basis of a record US trade deficit and terrorist bombings in Jordan. Gold has to watch out for the improvement in dollar mainly on solid treasury note auction, ongoing corporate profit repatriation and US interest-rate expectations. Silver also epitomised the trend that was visible in gold but it did better in terms of holding on and posting gains for the fifth consecutive day while copper also gained and went on to post a lifetime high.
Oil prices fell more than $3 a barrel this week and moved to a nearly four-month low price of less than $57 as bulging US crude stocks piled pressure on investors to sell. Oil prices have dropped more than $13 from a late-August record above $70 as signs of weakening oil demand growth and rising inventories in the United States offset hurricane damage in the US Gulf.
The bull trend that was witnessed in pulses last week carried on during the early part of the day but as expected they came in for the much expected correction midway through the week. Urad continues to hog the lime light for pulses but this time around it was for all the wrong reasons as the revival that was expected on Saturday after the correction turned out to be a nightmare and came crashing down firing on all cylinders. Chana and tur posted lifetime highs for the respective commodities.
It was a week that will be remembered for a long time in the annals of the domestic rubber history but for all the wrong reasons. It was a week that showed the biggest ever-single day loss since the insertion of the rubber futures market in India.
Another reason that makes the fall stand out was it brought an untimely end to the domestic futures prices catching up with international levels as the gap was narrowed to less than 4Rs. The higher level prompted the sellers to book their profit at the higher levels and the impending technical corrections didnt help the prices either.
Overall, at the end of the week the near month contract was down nearly 6% while all the forward months contracts ended down by nearly 1.5%. The Asian rubber prices also had a mixed week with the prices crashing down following a spate of profit booking and speculative selling at the higher prices.
The markets recovered on Friday to close better with exception of the Malaysian prices ignoring the fall in crude oil to close higher on a day to day basis but ended lower on a weekly basis. Fundamentally rubber prices look soft with supply in Thailand and Malaysia easing out after the monsoon. Supply worries are easing in Indonesia and that could keep prices at the edge.
The story of pepper during the week was one that brought some joy to the mind of people involved with pepper as the prices took an about turn for good and closed out posting gains to the tune of nearly 3% in Nmce and by more than 4% in NCDEX. The upward movement of the prices started on 8th after the Spices Board announced that it would release the WTO-compatible subsidy announced by the Union Government with retrospective effect from November 2 for export of pepper and value-added pepper products. This helped the investors to arrive at the conclusions that the exports have already begun and are likely to push the prices up further.
Elsewhere reports of an estimated drop in production to the tune of 20-30% also helped in choking up the volumes.
Courtesy: Geojit Commodities Ltd