How to trade in commodity, currency markets How to trade in commodity, currency markets amid subdued post budget sentiment

Updated: July 12, 2019 11:50:37 AM

Commodity markets were expecting some changes in the imposition of CTT (Commodities Transaction Tax), however there were no changes in the Union budget with regards to this agenda.

Rupee, Dollar, रुपया, डॉलर, US Fed, Interest Rate, Crude, Rupee On 11 Month High, Rupee Updates Price, Forex market, CurrencyUnion budget 2019-20 has had less of an impact on the commodity and currency markets, post budget, except gold which had quite a volatile fluctuation on account of change in the import duty.

By Prathamesh Mallya

Commodity markets were expecting some changes in the imposition of CTT (Commodities Transaction Tax), however there were no changes in the Union budget with regards to this agenda. Gold industry was also hoping a reduction of import duty on gold from the slab of 10 per cent to 6 per cent. In contrast, the government has imposed a duty of 12.5 percent on gold imports from previously 10 percent.

Union budget 2019-20 has had less of an impact on the commodity and currency markets, post budget, except gold which had quite a volatile fluctuation on account of change in the import duty. Except for the euphoria surrounding the increase in import duty on gold and the connected volatility, there is no reason for Commodities and currency markets to cheer about.

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The reason being, we are totally insulated from domestic markets and more connected with international markets. All the futures contracts traded on the commodity exchange are more in sync with the trends in the international market, although the regulator is doing its bit to bring in the commodity traded in delivery mechanism so that they are more in sync with the domestic markets by bringing more hedgers on the trading platform.

Since this budget did not have any major change with regards to Commodities and currency markets, the advice to investors/traders is to gauge the development in the overall global and follow the fundamentals/technical of specific commodities and place their trades accordingly.

The author is Chief Analyst – Non- Agri Commodities & Currencies – Angel Broking. The views expressed are the author’s own.

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