Commodity Trends: Gold recovers, Oil weakens

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2010

The coming week will witness a surge in gold demand and sales in India due to Dhanteras, considered auspicous for buying gold and also due to Diwali festivities.Gold prices corrected higher last week after touching the lowest level during mid-week. Oil prices may weaken on doubts about global recovery which in turn may affect oil demand in the fourth quarter of 2010.
MAJOR NEWS HEADLINES:
Commexes' turnover up 55 pc till Oct 15 this fiscal
NEW DELHI: The turnover of 23 commodity exchanges rose by 55 per cent to Rs 56.70 lakh crore till October 15 this fiscal over the same period a year ago, according to the Forward Markets Commission (FMC).
Coffee council study says importers quick in passing on price hike to retailers
As world coffee prices hit new highs, the hike appears to be passed on immediately at the retail level in importing countries. This relation is much stronger when price levels are high.
United Stock Exchange launch peps up currency derivatives trading
The two-year-old exchange-traded currency derivative market, which has been growing since the NSE and the MCX-SX began operating in the second half of 2008, has seen a sharp rise in daily traded volumes following the entry of a third player, the United Stock Exchange (USE).
FMC preparing governance norms for spot exchanges
The Forward Markets Commission (FMC) is working on market-related corporate governance norms for the spot exchanges. Official sources explained that this would form part of the guidelines FMC was preparing for granting exemption to spot exchanges from the Forward Contracts Regulation Act (FCRA) while undertaking one-day futures and intra-day netting
NCDEX may seek nod for non-delivery soyameal futures
The National Commodities and Derivatives Exchange Ltd (NCDEX) may approach the Forward Markets Commission seeking permission to launch non-delivery backed (intention-matching) contract on export grade soyameal, used in manufacture of animal feed.
Govt clears ICEX's iron ore futures contract
Paving the way for the Indian Commodity Exchange (ICEX) to launch iron ore contracts for futures trading, the Ministry of Consumer Affairs, Food and Public Distribution has asked the Forward Markets Commission (FMC) to include the mineral in the list of commodities that can be traded.
Kotak group serves an ACE for commodity futures
The Kotak group has launched its online commodity exchange ACE Derivatives and Commodity Exchange on Tuesday offering futures contracts in castor, soyabean, soya oil, rapeseed and chana.
NCDEX steps up non-agri trading
The National Commodity and Derivatives Exchange (NCDEX) is witnessing steady spurt in non-agri commodity futures trading since the last one month.
NSE launches currency options trading
The National Stock Exchange (NSE) has introduced trading in currency options on USD-INR (US Dollar-Indian Rupee) pair on Friday.
NSE currency options off to good start, USE lags
Currency options, which made their debut on Indian exchanges on Friday, had a decent run on the National Stock Exchange (NSE), where the turnover touched Rs 1,383.11 crore.
COMMODITY ANALYSIS
Gold
Gold price is taking a correction after reaching the lowest level in the mid week. On Friday, U.S. gold futures for December delivery rose $4.40 to $1,346.90. On Thursday US gold futures closes at $1320.80 on strong dollar. Gold futures rose on speculation that the Federal Reserve will increase debt purchases, weakening the dollar and boosting the metal’s appeal as an alternative investment.
Gold is expected to extend its gain to $1,353 per ounce, riding on an upward wave "c" and could reach an ultimate target at $1,373. Gold sales in India from October 31 to November 6, when the country celebrates Dhanteras and Diwali festivals, may rise by up to 40 percent on the year, in turn supporting the outlook for record imports in 2010, according to a senior World Gold Council official. Gold prices have risen 3.7% this month while Dollar has fallen 1.9%
Among other precious metals, Silver futures for December delivery rose 36.5 cents, or 1.5 percent, to $24.24 an ounce on the Comex. Palladium rose to a peak of $640.05 an ounce, its highest since May 2001. Spot palladium was later at $637.75 against $622.99. Spot platinum was at $1,697 an ounce against $1,688. MCX December gold futures closed at Rs.19760 with a weekly gain of 1.44% whereas silver prices closed at Rs 36782 an increase of 4.35 per cent.
Crude Oil
Crude oil fell this week as the dollar rose against the euro, reducing the appeal of raw materials as an alternative investment. End-of-the-month profit-taking and position squaring also pulled down crude futures. U.S. crude oil futures lower on this week after data showed that U.S. third quarter economic growth, though edging up as expected, was still anemic, stoking fresh worries about oil demand. On a weekly basis, front-month crude futures finished down 26 cents, or 0.32 percent, from the $81.69 settlement the previous Friday. On Friday, at the New York Mercantile Exchange, crude for December delivery ended down 75 cents, or 0.91 percent, at $81.43 a barrel. Brent Crude oil gained 0.26 per cent this week.
On a monthly basis, front-month crude futures rose $1.46 or 1.83 percent from the $79.97 close at the end of September.
Global oil demand will stay weak in the fourth quarter of 2010 as doubts over the health of the world economy continue to dampen business and consumer confidence. Reports say that Crude may decline next week as U.S. stockpiles increase.
OPEC crude oil supply rose in October, the first increase since July, largely because of higher output from Angola. Production increased 65,000 barrels, or 0.2 percent, to an average 29.01 million barrels a day from a revised 28.945 million in September, the lowest level since November, according to the survey of oil companies, producers and analysts.
India's crude imports declined in September, when Indian refiners processed 10.2 percent less oil from a year ago. On Friday, MCX November Crude Oil closes at Rs.3630, lower by 1.14 per cent before attaining a high of 3715.
Base Metals
Base metal prices ended on mixed trend this week as zinc and nickel gains. Economic data in the form of confidence indictors from Euro-zone came in better than expected and jobless claims in US also declined, this provided support to prices from not falling much but hardly helped them in moving higher.
U.S. copper futures lower, as GDP data came in as expected and investors squared positions before the Federal Reserve meets next week. Copper for delivery in December slid 5.5 cents, or 1.5 percent, to $3.7325 a pound at 12:12 p.m. on the Comex in New York. Prices are up 2.2 percent this month. On Wednesday, December copper touched $3.90 per lb, the highest for second-position futures since July 2008. London Metal Exchange copper stocks rose 475 tonnes to 368,500 tonnes on Friday. LME copper shed $141 to end at $8,199 a tonne. MCX November copper witnessed a downfall of 1.96% at Rs 369.10 before hitting a high of 382.40.

Source: Commodity Online