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Precious Metals
MCX gold prices shot upwards into unchartered territory and reached the much-talked about levels of Rs. 20,000/10gm, levels the country has never seen so far, spurred by the gains in global prices of the metal. Silver also ran after gold prices and marched higher than gold which resulted in the metal rallying to fresh 30-
year high levels. COMEX gold futures rose on tumbling dollar which gave a boost to commodity prices across the board. The talk of monetary easing in the United States, to boost the world's biggest economy has been hitting the U.S. currency for weeks, while benefiting dollar-priced commodities. African Barrick Gold also cut its
2010 production target for the second time in three months. We don’t see much of a respite for the dollar any time soon, especially when reports may show today that U.S. trade deficit widened further in August. Jobless claims data are also scheduled later today. Markets will remain volatile and gold may take some dips before going forward. In India, higher prices are still not marring demand for the yellow metal ahead of festive and marriage season. Jewelers are buying to build up stocks for festival sales. The nation’s imports this month may exceed 50 MT, according to Reuters’ sources. We expect prices to remain higher and trade in the close vicinity of Rs 20,000/10gm.
MCX gold prices shot upwards into unchartered territory and reached the much-talked about levels of Rs. 20,000/10gm, levels the country has never seen so far, spurred by the gains in global prices of the metal. Silver also ran after gold prices and marched higher than gold which resulted in the metal rallying to fresh 30-
year high levels. COMEX gold futures rose on tumbling dollar which gave a boost to commodity prices across the board. The talk of monetary easing in the United States, to boost the world's biggest economy has been hitting the U.S. currency for weeks, while benefiting dollar-priced commodities. African Barrick Gold also cut its
2010 production target for the second time in three months. We don’t see much of a respite for the dollar any time soon, especially when reports may show today that U.S. trade deficit widened further in August. Jobless claims data are also scheduled later today. Markets will remain volatile and gold may take some dips before going forward. In India, higher prices are still not marring demand for the yellow metal ahead of festive and marriage season. Jewelers are buying to build up stocks for festival sales. The nation’s imports this month may exceed 50 MT, according to Reuters’ sources. We expect prices to remain higher and trade in the close vicinity of Rs 20,000/10gm.
Base Metals
Base metal prices are taking a correction on the back of rebound in dollar index and paring of gains by European equities. All the base metals are trading lower by half a percent as traders might be booking profit. Most of the Asian equity markets closed with gains of close to a percent. European equity markets opened higher but could not sustain gains and are currently trading modestly in red. Dollar index which was trading lower by close to a percent has rebounded and is now trading lower by 0.6 percent. In the evening, trade balance and initial jobless claims data from US are due to be released. The expectation is that trade deficit will widen further and the jobless claims will remain at prior levels. This may put in pressure back on dollar index and thereby might support base metal prices. Overall, the bias continues to remain on the positive side, but the gains might be limited.
Base metal prices are taking a correction on the back of rebound in dollar index and paring of gains by European equities. All the base metals are trading lower by half a percent as traders might be booking profit. Most of the Asian equity markets closed with gains of close to a percent. European equity markets opened higher but could not sustain gains and are currently trading modestly in red. Dollar index which was trading lower by close to a percent has rebounded and is now trading lower by 0.6 percent. In the evening, trade balance and initial jobless claims data from US are due to be released. The expectation is that trade deficit will widen further and the jobless claims will remain at prior levels. This may put in pressure back on dollar index and thereby might support base metal prices. Overall, the bias continues to remain on the positive side, but the gains might be limited.
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